Starbucks Financial Report Breakdown
Starbucks has grown into a common household name with storefronts all over the world. Currently, there are more than 17,000 coffee shops in more than fifty countries. Starbucks not only offers their customers coffee, but coffee beans, accessories, teas, brewers, music and food; all of which contribute to their financial success. Starbucks storefronts are now seen inside grocery stores as well, allowing the shopper browse the aisles while sipping a caffeinated beverage. Starbucks also draws its followers and loyal customers by promoting themselves as being an environmental conscious company.
Their goal is to have 100% recyclable or reusable cups by 2015. Starbucks is in the process of reducing their carbon footprint through water conservation and green construction. All of these factors have made Starbucks the largest coffee corporation in the world. Their efforts include cups made of recycled goods, and they even offer a plastic reusable cup for only a dollar, that can be used thirty times on average. They also recycle plastic and paper products and waste separately.
SBUX: Total Assets, Recent Annual Reporting and Cash/ Cash Equivalent Total assets at the end of Starbucks most recent annual reporting period is $8,219. million at the end of “September 30, 2012, which was a growth of $858. 8 million from October 2nd, 2011. This included $1,188. 6 million cash and cash equivalents at the end of September 30th, 2012 (Starbucks Investor Relations, 2012). ”
The balance sheet their assets include: cash & cash equivalents, short term investments, accounts receivable, inventories, prepaid expenses, deferred income taxes, long term investments, equity & cost investments, property, plant and equipment and finally goodwill. SBUX: Accounts Payable, Net Revenue with Change of Revenue Starbucks has “$398. million in accounts payable at the fiscal year end of September 30, 2012 (Starbucks Investor Relations, 2012)”. That was a decrease of 141. 9 million from the previous year. The decrease shows that Starbucks, as a company, was able to pay off some of their debts. They were able to do so because their net revenues for the last three annual reporting periods showed growth. In 2010 their net revenue was $10. 7 billion, then $11. 7 billion in 2011, and lastly $13. 3 billion most recently September 30, 2012.
The net income from 2011 to 2012 showed a growth of $138. billion (Starbucks Investor Relations, 2012). This growth during such trying times shows the strength of Starbucks Coffee Company.
SBUX: Information on Potential Investors and Employee’s All of the information above is important to potential investors, executive officers, employees, creditors, and vendors. Potential investors will review this type of information to decipher the strength of the company; and to decide whether they want to invest their own money into Starbucks Coffee Company. Executive officers use the financial statements and notes on a daily basis when making decisions for the company.
Executive officers review past information and trends to see what needs to be done different, or kept the same in the next accounting cycle. For example, Starbucks recently had to close down some stores in 2011 because they had opened too many stores in the years before. The executive officers learned to open stores at a less frequent rate in the following years. The financial statements are also important to Starbucks employees; Starbucks employees have a special benefit option to purchase Starbucks Coffee Company stock at a discounted rate through Fidelity Investments.
Before deciding to participate in this perk employees would need to research Starbucks just like any potential investor before investing their hard earned money. Even if an employee is not interested in investing in their company financial statements would still be of interest to employees who want more information. For example, when Starbucks was closing stores the employees were worrisome that Starbucks might be in financial trouble, and worrisome that their store might be closing next.
Although that particular information wouldn’t be in the financial statements employees could check out the financial statements to see that even though Starbucks was closing stores they were still doing finically well, and still very profitable. Creditors will review financial statements to see if the company has enough funds coming in to pay back its current debts, and if Starbucks was to request more loans or funding the creditor would want to ensure they would be paid back, by looking at the financial statements and the growth Starbucks Coffee Company has had the ast three years it is clear they can pay back their debts as they come due. Vendors, like creditors, would also be interested in this information to ensure that they will receive payment and see how successful one of their potential partners. In closing, based on the consolidated balance sheet Starbucks Coffee Company has total current assets as of “ September 30, 2012 is $4,119. 6 million, which is a growth of $404. 7 million from October 2, 2011 (Starbucks Investor Relations, 2012)”.
Starbucks is a healthy, thriving business regardless of the economic downward spiral the United States has been suffering. Starbucks Coffee Company has shown an increase in assets and net income in the last three years, while decreasing their debt at the same time. One reason they have been so successful is because Howard Shultz returned to Starbucks and with fresh eyes he quickly saw that stores needed to be closed down to reduce debt and increase revenues so he did just that and it has helped Starbucks grow tremendously the last couple of years.