Presented by- sudhanshu

Established in 1971 at Seattle, Washington Famous for its quality fresh-roasted coffee beans and stylish atmosphere. Over 9,000 stores worldwide Product lines include :

− beverages (coffee, Tazo tea, soda, juices)− pastries− whole coffee beans− coffee-related hardware and equipment− merchandise (mug, CDs)

Overview

1971 – Starbucks Coffee, Tea, and Spice store (coffee bean roasting) opened in Seattle’s Pike Place Market.

1982 – Howard Schultz joined Starbucks.

1986 – Howard Schultz established Il Giornale Coffee Company.

1987 – Il Giornale acquired Starbucks and changed the name into Starbucks Corporation.

1992 – Starbucks decertified the union and made IPO.

1995 – Starbucks Coffee International opens in Japan − Starbucks implemented ESOP.

Timeline

Timeline

1996 – Starbucks’ began selling bottled Frappuccino.

1999 – Starbucks acquired Tazo Tea.

2000 – Acquired Hear Music, a San Francisco-based company

2003 – Starbucks acquired Seattle’s Best Coffee

2005 – Introduced Starbucks Coffee Liqueur; Acquires Ethos Wate

Executive Summary

Starbucks Corporation, since its start, has been steadily growing every year. Each fiscal year, the company expands its enterprise to more locations around the world and produces new and unique products for consumers. The company’s paramount goal is to become the most respected coffee distributor in the world. In order to fulfill this goal, Starbucks plans to continue to expand, to develop new products, and to discover new and innovative means of distribution. Starbucks is not only concerned with making the most profits but they are also concerned about the wellbeing of their stakeholders, which is what I believe makes the company such a success.

Annual Report Fiscal Year 2013

Current Ratio

Current assets/Current liabilities

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2010 2011

Current Ratio

Dividend Per share

Stock Market Information

Most recent price of the company’s stock: $34.05 per share Twelve month trading range of the company’s stock of past two fiscal

years:3 sep 2012 High Low

4th Quarter $23.94 $21.29

3rd Quarter 22.09 18.62

2nd Quarter 19.48 16.15

1st Quarter 31.94 23.53

2 sep 2013 High Low

4th Quarter $26.35 23.08

3rd Quarter 28.13 22.78

2nd Quarter 30.80 24.79

1st Quarter 31.94 23.53

Income Statement

The format of the income statement is multi-step:(amounts in millions of dollars)

Sep 2013 Sep 2012

Gross Profit $1598.18 $1312.64

Income from Operations

780.62 606.59

Net Income 494.47 388.97

Balance Sheet

(amountsin millions of dollars)

Assets Liabilities + Stockholder’s Equity

Sep 2013 $3514.07 $1423.43 + $2090.63

Sep 2012 1350.90 916.33 + 2470.21

Statement of Cash Flows

The cash flows from operations are more than net income for the past two years

The company is growing through investing activities, I.e. buying property, plant and equipment and other long lived assets

Starbucks primary source of financing is borrowing. The biggest decrease in the company’s financing activity is the issuance of its stock.

Over the past two years, the Starbucks cash has increased steadily. In 2012 the company’s net cash was $99.46 million where in 2013 the company brought in $173.81.

Liquidity Ratios

In millions 2 sep 2013 3 sep 2012Working Capital -$17.67 $604.70

Current Ratio .9856 times 1.748 times

Receivable Turnover

38.50 times 37.76 times

Average Days’ Sales Uncollected

9.000 9.667

Inventory Turnover

10.20 5.202

Avg Day’ Inventory on Hand

35.00 70.17

Profitability Ratio

In millions 2 sep 2013 3 sep 2012

Profit Margin 7.800% 7.810%

Asset Turnover

2.001 1.591

Return on Assets

14.10% 11.80%

Return on Equity

22.18% 15.8%

Solvency Ratios

Comparison

In millions 2 sep 2013 3 sep 2012

Debt to Equity .081 .338

Market Strength Ratios

In millions 2 sep 2013 3 sep 2012

Price/earnings per share

$ 61 $45.5

Dividend Yield 0.0 0.0

Ratio

SWOT Analysis

Strengths Weaknesses1. Brand name recognition2. Quality Products3. Potential Internal Strengths4. Good Marketing Skills 5. Location6. Visionary leader7. Distribution8. Manufacturing competencies

1. Non-pioneer in global market2. Narrow Product line3. Complicated Products

Opportunities Threats 1. Expand into Foreign Markets2. Widen Product Range3. Diversify into new Growth

Businesses4. Apply brand name capital in new

areas

1. Change in consumer tastes2. City regulations3. Increase in domestic competition4. Changes in economic factors5. Downturn in economy

Growth Rates

Stores

1,000new storesin 2012

Learning & Growth– Quality employees– More recipes created

Financial– Net Income– Same store sales– Earnings per share

Customers– Increase core group– Support shade growth– Sustainability guide

Operations– New store growth– Efficiency– Source: coffee beans

Reasons to be bullish

A strong levered free cash flow of $770 million

A good quarterly revenue growth of 14.7%

Net income soared from $391 million in 2009 to $1.24 billion in 2011.

Sales increased from $9.7 billion in 2009 to $11.7 billion in 2011.

Annual EPS from $.87 in 2007 to $1.52 in 2011

Reasons to be bullish

A manageable payout ratio of 42%

It has strong institutional support, % held by institutions is 78%

A projected 3-5 year EPS growth rate of 17.7%

Projected growth rates of 21.29% & 25.2% for 2014 and 2015 respectively.

Industry Situation and Company Plans

Starbucks coffee is a part of the special eateries industry. This particular industry is relatively small in reference to the companies it includes. Companies such as Panera Bread, Caribou Coffee Company and Tim Hortons Inc., examples of other names seen in this industry . This industry is one that is relatively elastic being that people’s incomes, tastes and preferences affect the demand of the good. The prosperity of this industry depends somewhat on consumer goods and how badly they want the product. On the flip-sde, the industry, particularly coffee, depends on many other factors that include climate and its affect on the supplies needed to produce coffee.

The outlook on the prosperity of Starbucks for the future is a very positive one. The company has many plans for the next fiscal year and because of the company’s ongoing success, those plans will most likely become a reality. In fiscal year 2013, Starbucks expanded their international activity in countries including Jordan, the Bahamas and Ireland. In the upcoming year the company plans for future growth in countries including Brazil ,russia that will contribute to the projected opening of 1800 new stores. Starbucks expects a 20% increase in annual net revenue growth for the next 3-5 years. Starbucks, however, does not just focus on financial success. The company strives to build positive partnerships with its suppliers, coffee farmers, customers and surrounding environment.

Richly brewed coffee leaves you mesmerized at its flavor and aroma

http://www.flavoreddelights.com/wp-content/uploads/2010/03/brewed-coffee.jpg

Thank you!