Financial Analysis of Starbucks

1.                                Financial Analysis of Starbucks

                                              Laura Torres

                                                   Southern New Hampshire University

We can learn a lot from the financial statements of a company. They give us an insight into how they company is using resources, or how they are performing compared to previous years. Here I will be looking at the financial statements of Starbucks, specifically analyzing three main areas. The three areas in question are accounts receivable, asset acquisition, and debts.

1. Accounts Receivable

Accounts receivable is an account that holds promises for future collection of cash. In 2018 Starbuck’s net account receivable was $693.10 which was down $177.30 from the previous year at $870.40. This is  20.4% decrease.  This would indicate that Starbucks has collected more of the money owed in 2018 than in 2017, which would increase their total current assets. Since assets provide benefit to a company we can conclude that  having  higher total current assets is  a good thing for Starbucks.

1. Asset Acquisition, Depreciation, and Amortization

For 2018 fixed assets increased $1,009.60 from $4919.50 to $ 5,929.1. This is a 20.5% increase from 2017 to 2018. At first this would appear that costs have increased but when they are compared to total assets you will find that’s not the case. Fixed assets in 2017 accounted for 34.2% of total assets, and in 2018 that fell to only 24.5% of total assets. So even though the dollar amount was higher it accounted for a lower percentage of the total assets. Which is a good thing for Starbucks.This however is no the case for intangible assets. In 2017 intangible assets were $ 1980.60 and 13.8% of total assets. This number skyrocketed in 2018 to 4583.80 which was 19% of total assets. Intangible assets rose by 131.4% or $2603.20. Starbucks was spending a significant amount more on goodwill in 2018 than in the previous year. Which isn’t necessarily a bad thing depending on how the money is being used. Since items tend to depreciate the same amount per year it’s no surprise that depreciation and amortization were closely matched in both years. Depreciation increased by 23.3% rising from %1,011.40 to $1,247.00, but they both accounted for similar percentages of net revenues with it accounting for 4.5% in 2017 and 5% in 2018.