Finance Group project.docx - 1 Starbucks Valuation Starbucks Valuation FISV5526 Finance Reporting Control Professor Dawn Lopez June 2 2019 2 Starbucks

Finance Group project.docx - 1 Starbucks Valuation...

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1 Starbucks Valuation Starbucks Valuation FISV5526 Finance Reporting & Control Professor: Dawn Lopez June 2, 2019
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2 Starbucks Valuation Table of Contents General information Short Term Liquidity Capital Structure and Solvency Asset Utilization Profitability Equity Valuation Memorandum References Appendices 1.1 Current Ratio 3.1 Net Operating Asset Turnover 4.1 Profit Margin and Return on Net Operating Assets 5.1 Starbucks Historic Sales
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3 Starbucks Valuation General Information Our analysis will focus on the financial data for Starbucks versus Dunkin Donuts. The company specific data was conducted using data from the United States Securities and Exchange Commission. We also leveraged stock analysis on net and GuruFocus and Macrotrends.net for industry ratios. Short Term Liquidity According to Investopedia, a company's liquidity is its ability to meet its short-term financial obligations. Liquidity ratios attempt to measure a company's ability to pay off its short-term debt obligations. This is done by comparing a company's most liquid assets, those that can be easily converted to cash, with its short-term liabilities. The current ratio is a good measurement to understand the short term liquidity in a company. A current ratio lower than one is a red flag. This means that the company may not be able to pay off short term debt. According to GuruFocus Starbucks Corp's current ratio for the quarter that ended in Mar. 2019 was 0.94. This indicates that the company may have difficulty meeting its current obligations. Low values, however, do not indicate a critical problem. If Starbucks Corp has good long-term prospects, it may be able to borrow against those prospects to meet current obligations. Dunkin' Brands current ratio for the three months ending March 31, 2019 was 1.54. This means Dunkin has a better ratio than Starbucks. Dunkin has more financial security because their ratio is above 1. This indicates a strong ability to pay off short term debt because their current assets far exceed their current liabilities. Capital Structure
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4 Starbucks Valuation The debt-to-equity ratio is calculated by dividing a company's total liabilities by its shareholder equity. These numbers are available on the balance sheet of a company's financial statements.
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  • Summer '19
  • Balance Sheet, Generally Accepted Accounting Principles, Starbucks Corp

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