Starbucks Financial Analysis

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Starbucks Corporation

Contents

I. Executive Summary…………………………………………………………………………………….………...…3

II. Company Overview………………………………………………………………………………………….…..….5

III. Data ………………………………………………………………………………………………………….…..….7

IV. Financial Statement Analysis………………………………………………………………………….….……....8

V. Ratio Analysis………………………………………………………………………………………………………10

VI. Valuation……………………………………………………………………………………………………….…..15

VII. Recommendation………………………………………………………………………………………………...16

VIII. Reference……………………………………………………………………………………………………..….17

XI. Appendix………………………………………………………………………………………………………..…18

Starbucks Corporation

I. Executive Summary

Wake up and smell the coffee, Starbucks is everywhere. What was once a simple chain of coffeehouses has become a force of nature in the retail business. With so many outlets throughout the world, Starbucks has used its chain to branch out into other retail segments. The company also has big plans for the future, setting the goal of expanding its chain to 40,000 locations worldwide. It hopes to open about 2,400 new outlets in 2007. Starbucks also continues to invest in product development to expand its brand into new customer segments. At the local coffee shops, Starbucks is starting to expand its menu of breakfast items and other hot foods to more than 6,500 locations by 2008 to increase its revenue from food sales and to encourage customers to spend more time at its coffee shops. It also continues to add new blends to its selection of coffee drinks (Hoovers, 2007).

After doing extensive financial research on Starbucks, I have gathered important information and recommendations for current shareholders and potential investors. This paper begins with an overview of the company followed by a SWOT and financial statement analysis. Through analysis, I was able to conclude different financial ratios that helped me see how Starbucks’ stock was doing compared to other companies in its industry. I was able to...