Liquidity ratios are the primary source of information for esteemed prospective investors, since it depicts the extent to which the company can offset current liabilities. The current liabilities for Starbucks stand at $6.84B, $5.43 in 2018, and $6.17 in 2019. The existing assets in 2017 were at $6.88B, $7.68B in 2018, and $ 5.65B in 2019. In 2017 the current ratio was 1.01, 1.41 in 2018, and 0.92 in 2019. A current rate higher than 1 is a positive indicator of the performance of a company (Lin, 2019). The current rates signify that Starbucks can effectively use its assets to settle liabilities. The quick ration for Starbuck Corporation in 2017 was 0.7 before going up to 1.7 and 0.67 in 2018 and 2019, respectively.
Profitability Ratios (2017-2019)
Profitability ratios indicate how well the company employs its assets to yield returns. Costs, expenses as well as profits incurred by the company are all analyzed using profitability ratios. Over 2017, Starbucks Corporation's profits margins increased by 19.63% in 2017, 9.58% in 2018, and 7.1% in 2019. The profit margins point out that Starbucks Corporation properly utilized its labor and raw material to yield profits. ROA for Starbuck were 28.45%, 15.36% and 18.52 % in 2017, 2018, and 2019 respectively.
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Efficiency Ratios (2017-2019)
Efficiency ratios are important during an internal analysis of company assets and liabilities. The receivable turnover ratio is calculated by dividing annual credit sales by account receivables. The receivable turnover ratios for 2017, 2019, and 2019 are 38.97, 33.81, and 31.71, respectively. The inventory turnover ratio was 6.703 in 2017, 5.66 in 2018, and 5.55753 in 2019. The net fixed asset turnover is calculated by dividing total revenue by the net fixed asset. Debt-to-equity ratio of Starbucks was 0.79 in 207, -3.17 in 2018 and -1.79 in 201 9.
Reference
Lin, L. (2019). Corporate Governance and Liquidity Risk of Starbucks Company.
