Starbucks Corporation
Starbucks Corporation is one of the biggest companies in the food and beverage industry. Headquartered in Seattle, Washington, the company operates a coffee chain that deals with coffee production. The company’s unique approaches towards clients, as well as its history, enhance its position as the leading coffee producer. In recent years, it has illustrated a constant growth in both its income and other financial indexes. Its approaches towards business as well as methodologies display positive tendencies, and its tremendous revenue has seen the company become one of the fastest-growing companies. For instance, according to Starbucks Corporation (2020), the company had more than 28,000 locations worldwide at the end of 2018. Besides, the growth has been fueled by its Initial Public Offering (IPO), which currently trades at $ 87.56 per share in the NASDAQ stock market with a market capitalization of 102.795 billion. A large number of competitors that are gaining popularity on the market continually has affected its profitability over the last few years.
The company’s profitability remains high, and the tremendous increase in revenue is a positive signal for investors who have any plans regarding the company. According to Palepu and Healy (2013), the company’s operating income has increased by $8,000,000. The growth of the company can be substantiated by scales of the business as it operates all over the world. In turn, the firm’s financial health of its total assets indicates excellent results in the scope of growth. For example, since 2014, the company’s revenue has risen by $14 billion, which has improved its performance indexes. Consequently, investors’ interest in the company has increased in more recent years. On the other hand, its long term debts have grown to $7 billion since the year 2014.
The firm’s return on equity has increased by 0.9 percent since the beginning of 2014. Its current ratio, however, has slightly decreased. For instance, in the year 2017, the company’s quick ratio was 3.8 percent. By 2019, the ratio had been reduced to 3.69 percent. The decrease, though not significant, indicates a healthier financial capacity than its competitors that include the Dunkin’ Donuts. The company’s current liabilities have increased significantly. For example, in 2017, its current liabilities were at the point of $0.39 billion, rising to $0.58 billion in the year 2019. Lin (2019) points out how Starbucks has a higher performance index due to its large scales of business activity. For instance, in 2017, its index was at the level of $1.3 billion, while the current situation stood at $15.2 billion.