Starbucks

Introduction
Financial analysis is widely used by the firms because the firms involves many parties like: (owners, management, customers, suppliers, workers and investors) all this stakeholders wants to know how the company work and evaluate the success of the company of the market We will use financial analysis in this case to evaluate the firm's activity and firm's competition in the market but first we should ?know what the financial statement is and how we use it

?What is financial analysis

financial analysis : is conversion of financial date to useful information to help in decision making and also referred to financial statement analysis and refers to evaluation of the stability and profitability of the company or the firm and the financial analysis often assess 4 elements of the firm Profitability: is the ability to earn income and stable growth -1 determined period whatever this period is long term period or short term period and the profitability usually come from analysis of income statement solvency: is the ability to pay obligation and other liabilities to -2 the creditors in the long term period and solvency usually come from ?analysis of statement of balance sheet Stability: the firm's ability to remain in the market in the long -3 term period and stability usually comes from analysis of all financial statement

Liquidity: is the ability to liquidate the current assets to cash -4 to pay any immediate liabilities and liquidity usually come from analysis of cash flows statement and statement of balance sheet

(How we use financial analysis? (Methods

The ratio analysis is the most important analysis in financial analysis and there are 3 methods to use it Past performance: by comparing the ratios of company for -1 determined period like 5 years Future performance: using some information from the past and by -2 mathematical and statistical techniques to forecast for the future Comparative performance: by comparing the ratios of company -3 with the other companies in the market

Global Well-Known Companies Providing Financial Analysis

Deloitte & Touche Company Ernst & Young Company PricewaterhouseCoopers Company KPMG Company Grant Thornton Company McGladrey & Pullen Company BDO Seidman Company

Starbucks company profile

The company history begin in 1971then we were retailer of coffee, tea and spices with a single store in seattle's pike place market

:The company mission To inspire and nurture the human spirit one person, one cup and one neighborhood at a time

:The company vision

To be the first company makes the coffee, tea drinks in the world

:The company history

The first starbucks opened in 1971 by three owner's English teacher (jerry Baldwin) history teacher (ziev siegel) and writer (Gordon bowker) to sell high quality coffee and equipment After that from 1971 to 1976 no big changes After that in 1983 Howard to Italy Until 1984 the original owners purchase a lot of locations in USA and opened more than 33 branches in USA After that from 1984 to 1990 more expansions in branches until it reach to 84 stores After that in 1991 it opened the first licensed airport store And until 1992 the starbucks made a lot of large expansions a broad (USA like (Europe Africa Asia And now the company has more than 16900 stores in 55 countries

:The starbucks products & activities

The coffee: more than 30 kinds of Arabica coffees Handcrafted beverages: more than 10 kinds of it Merchandise: all accessories of coffee and tea and mugs Fresh food: sandwiches and fruits cup Ice cream: more than 5 kinds of it

:Starbucks worldwide and its location

From the beginning of foundation of the company until now more than 16000 stores opened all over the world Starts in 1971 in USA, Washington Then in 1984 in Canada Then from 1985 to 1995 euro and china Then in 1996 in Philippine Then in 1997 in Japan Then in 1998 in Malaysia New Zealand -Taiwan -Thailand and UK Then in 1999 in Kuwait Lebanon and south Korea Then in 2000 in Hong Kong - Qatar Saudi- Arabia Then in 2002 in Oman and Spain Then in 2003 in turkey

Then in 2004 in France Then in 2006 in Brazil and Egypt And after that to a lot of countries all over the world

Investors opinion about Starbucks

A lot of investors and specialist financial analysis' Saied that the stock of Starbucks Company is very good because of more things like

High growth rate Easy to liquidity Easy to transfer High dividends yield Good career history Good competition in stock exchange The stability and profitability of stock The leadership in the market and differentiation

Sarbucks financial analysis We will start with financial statement analysis

First: balance sheet analysis assets : is any resource has the ability to generate 1 cash and money in short term period ( current assets ) ( or long term period ( fixed asset 2003 Total assets Percentage
2,729,746 147.5%

2002
120%

2001

2,214,392 1,849,942 100%

By using trend analysis and comparing the total assets of the company in the three years we will find that Total assets increased by 20 % from 2001 to 2002 1 Total assets increased by 27.5 % from 2002 to 2003 2 Total assets increased by cumulative effect 47.5 % from 2001 to -3 2003 :Comment The company's assets increased in 2 years by approximately 50% of the original total assets that mean the company made Hugh expansions in these 2 years and opened a lot of stores in many countries

Current assets: is any resource has the ability -2 to generate money in short term period and can liquidate it to cash in period less than 1 year

By using trend analysis and comparing the current assets of the company in the three years we will find that Current assets increased by 30 % from 2001 to 2002 1 Total assets increased by 25.5 % from 2002 to 2003 2 Total assets increased by cumulative effect 55.5 % from 2001 to -3 2003

:Comment
The company's current assets increased in 2 years by approximately 56% of the original current assets that mean the company have more assets that can use it or liquidate it in any time to pay any immediate (obligations (solvency problem is low in primary analysis

Fixed assets: recourses can't generate cash in short -3 term but can generate cash in long-term and very difficult to liquidate it in a period less than one year

By using trend analysis and comparing the fixed assets of the company in the three years we will find that Fixed assets increased by 14 % from 2001 to 2002 1 Fixed assets increased by 25 % from 2002 to 2003 2 Fixed assets increased by cumulative effect 39% from 2001 to 2003 -3 :Comment The company's fixed assets increased in 2 years by approximately 39% of the original fixed assets that mean the company Has more fixed assets to make high expansions and that mean (more stability (stability problem is low from the primary analysis

:cash -4
Is the most liquid asset in current assets and usually companies use it to pay any obligations and responsibilities or liabilities on it

By using trend analysis and comparing the cash of the company in the three years we will find that

Cash decreased by 12 % from 2001 to 2002 1 Cash increased by 89.5 % from 2002 to 2003 2 Fixed assets increased by cumulative effect 77.5 % from 2001 to -3 2003 :Comment The company's cash increased in 2 years by approximately 77.5% of the original cash but the company has shortage in cash in 2002 may be due to increase in AFDA OR increase in collection days but in 2003 more increases in cash due to good efficiency in collecting money and low collection period in this year

:inventories -5

The raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business's assets that is ready or will be ready for sale. Inventory represents one of the most important assets that most businesses possess

2003
Inventories Percentage

2002
263,174
119%

2001
221,253
100%

342,944
155%

By using trend analysis and comparing the inventories of the company in the three years we will find that Inventories increased by 19 % from 2001 to 2002 1

Inventories increased by 36 % from 2002 to 2003 2 Inventories increased by cumulative effect 55 % from 2001 to 2003 -3 :Comment The company's inventories increased in 2 years by approximately 55% of the original inventories and in this case may be 2 probabilities