Free Research Paper About Company Analysis

Starbucks

Summary of Business and Industry
Starbucks is a global coffee company with its origin in America. The company has a chain of coffeehouses in different cities across the US as well as in different parts of the world. The coffee industry is competitive, but Starbucks has been a great performer and a market leader for a long time. It is due to their innovative and creative thinking that they have been able to leap ahead of their competitors like Costa Coffee with brilliant innovative ideas to satisfy customer needs (Schultz & Gordon, 2011). The company has gone through some up and down financial times but has reinvented itself each time and came out stronger. The company had a rough patch in 2008, partly due to the financial meltdown and also due to poor strategies and deviation from its core principals. It has, however, reinvented itself with the return of its CEO Mr. Howard Schultz. The reinvented Starbucks gives its customers more than just the coffee. It gives them social class and a comfortable environment in which customers they can sip their coffee while listening to soft music or surfing through the internet using free Wi-Fi in selected stores. Starbucks is the fastest growing and expanding company in the coffee industry as compared to its major competitors like Dunking Donuts, McDonald's, and Caribou Coffee.
Starbucks uses some foreign names on their different coffee brands to give them uniqueness amongst the customers (Schultz & Gordon, 2011). The names are derived from different countries from which the variety of coffee offered has been drawn. They use Italian, Brazilian, Spanish, among other names on their coffee brands. Their service delivery in the stores is much more customized and personalized to make the customers feel happy and recognized. The company’s stores are full of well trained and polite employees who serve customers with great distinction.

Recent Financial Performance

After the 2008 financial difficulties and poor business performance that affected Starbucks just like many other firms in the US and beyond, the company has stabilized and posted some positive financial results. The table below shows some key recent financial results for the company as per its 2013 financial report.
The table above indicates some of the key financial results for Starbucks over the last three years. The results indicate a positive performance from the company between the year 2011 and 2013. The total revenue figures indicate a continuous growth as the company continues to stabilize from the 2008 blip that it experienced. The increase in revenue is also as a result of the growing popularity of the company due to the quality of their services and products. The company is known for purchasing and roasting high-quality coffee products that have endeared many customers to them (Young & Cohen, n.d.).
As can be seen in the table above, more investors are still trooping into the company. Income from equity investees is rising each year from 2011 sharply, an indication of investors’ confidence about the company’s future financial performance (Bhimani, 2012). Starbucks has been able to declare dividends to its shareholders for the three years reflected above. The dividends for each successive has been on the rise indicating increasing financial profitability from the company. The profitability is attributed to customers' goodwill to the company, and the increasing number of new stores being opened around the world. Employees’ etiquette towards customers cannot also be ignored.
A comparison of the company's current assets and current and current liabilities for two successive years as shown above, indicates that its liquidity status is healthy and that at any particular time the company can offset its due current liabilities. Shareholders' equity, on the other hand, has had a slight roller coaster between 2011 and 2013. The amount increased between 2011 and 2012 before declining between 2012 and 2013. A similar pattern is visible with the non-controlling interests in the company. Starbucks can, thus, be said to be in a stable financial situation (Bhimani, 2012).

Dividend History

The company’s dividend history has been positive for investors with it paying dividends almost every year. Starbucks average dividend payout per year stands at 1.40% according to yahoofinance.com, 2015. As expressed in the company’s financial report of 2013, it has always paid out dividends to its shareholders diligently. Indeed, that is the reason behind the company's increasing number of investors. The company shares and options are traded on the NASDAQ where they are currently trading at the rate of $94.22 per share (Finance.yahoo.com, 2015). The price has been steadily increasing indicating investors’ appetite for the company’s dividends.

References

Bhimani, A. (2012). Introduction to management accounting. Harlow: Financial Times Prentice Hall.
Finance.yahoo.com,. (2015). SBUX Key Statistics | Starbucks Corporation Stock - Yahoo! Finance. Retrieved 3 March 2015, from http://finance.yahoo.com/q/ks?s=sbux
Schultz, H., & Gordon, J. (2011). Onward. New York, NY: Rodale.
Young, S., & Cohen, J. Corporate financial reporting, and analysis.