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Starbucks Common-Size Comparative Income Statements |
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Common-Size Percent* |
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|
$ millions |
Current Yr. |
Prior Yr. |
Current Yr. |
Prior Yr. |
|
Net Sales |
23,518.0 |
26,508.6 |
100.00% |
100.00% |
|
Cost of Sales |
18,458.9 |
19,020.5 |
78.49% |
71.75% |
|
Gross margin |
5,059.1 |
7,488.1 |
21.51% |
28.25% |
|
Research and development |
0.0 |
0.0 |
0.00% |
0.00% |
|
Selling, general and administrative |
1679.6 |
1824.1 |
7.14% |
6.88% |
|
Depreciation and Amortization Expenses |
1431.3 |
1377.3 |
6.09% |
5.20% |
|
Other Operating Expenses |
430.3 |
371.0 |
1.83% |
1.40% |
|
Total operating expenses |
3541.2 |
3572.4 |
15.06% |
13.48% |
|
Operating Income |
1517.9 |
3915.7 |
6.45% |
14.77% |
|
Other income, net |
(353.5) |
550.5 |
-1.50% |
2.08% |
|
Income before provision for income taxes |
1,164.4 |
4,466.2 |
4.95% |
16.85% |
|
Provision for income taxes |
239.7 |
871.6 |
1.02% |
3.29% |
|
Net loss attributable to noncontrolling interests |
(3.6) |
(4.6) |
-0.02% |
-0.02% |
|
Net income |
$ 928.3 |
$ 3599.2 |
3.95% |
13.58% |
Calculations
Common-size percent = ( Drake et al., 2012 ).
For the calculation, base amount is the net sales ( Drake et al., 2012 ).
Cost of Sales
|
Current Year (2020) |
Prior Year (2019) |
|
Cost of Sales = product and distribution costs + store operating expenses Cost of Sales = 7,694.9 + 10,764.0 Cost of Sales = 18,458.9 Common-size percent = ×100 Common-size percent = 78.49% |
Cost of Sales = product and distribution costs + store operating expenses Cost of Sales = 8,526.9 + 10,493.6 Cost of Sales = 19,020.5 Common-size percent = ×100 Common-size percent = 71.75% |
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Gross Margin
|
Current Year (2020) |
Prior Year (2019) |
|
Gross Margin = Net Revenue – Cost of Sales Gross Margin = 23,518.0 – 18,458.9 Gross Margin = 5,059.1 Common-size percent = ×100 Common-size percent = 21.51% |
Gross Margin = Net Revenue – Cost of Sales Gross Margin = 26,508.6 – 19,020.5 Gross Margin = 7,488.1 Common-size percent = ×100 Common-size percent = 28.25% |
Total Operating Expenses
|
Current Year (2020) |
Prior Year (2019) |
|
Total operating expenses = 0 + 1679.6 + 1431.3 + 430.3 Total operating expenses = 3541.2 Common-size percent = × 100 Common-size percent = 15.06% |
Total operating expenses = 0 + 1,824.1 + 1,377.3 + 371.0 Total operating expenses = 3,572.4 Common-size percent = × 100 Common-size percent = 13.48% |
Operating Income
|
Current Year (2020) |
Prior Year (2019) |
|
Operating Income = Gross margin- Total Operating expenses Operating Income = 5,059.1 – 3,541.2 Operating Income = 1,517.9 Common-size percent = × 100 Common-size percent = 6.45% |
Operating Income = Gross margin- Total Operating expenses Operating Income = 7,488.1 – 3,572.4 Operating Income = 3915.7 Common-size percent = × 100 Common-size percent = 14.77% |
Other Income, Net
|
Current Year (2020) |
Prior Year (2019) |
|
Other Income, net = net nonoperating interest income expense + other income expenses Net nonoperating interest income expense = interest income and others, net – interest expenses Net nonoperating interest income expenses = 39.7 – 437.0 = -397.3 Other income expenses = income from equity investees – restructuring and impairments Other income expenses = 322.5 – 278.7 = 43.8 Other Income, Net = -397.3 + 43.8 = - 353.5 Common-size percent = × 100 Common-size percent = - 1.50% |
Other Income, net = net nonoperating interest income expense + other income expenses Net nonoperating interest income expense = interest income and others, net – interest expenses + Net gains resulting from divestiture of certain operations Net nonoperating interest income expenses = 96.5 – 331.0 + 622.8 = 388.3 Other income expenses = income from equity investees – restructuring and impairments Other income expenses = 298.0 – 135.8 = 162.2 Other Income, Net = 388.3 + 162.2= 550.5 Common-size percent = × 100 Common-size percent = 2.08% |
Income Before Provision for Income Taxes
|
Current Year (2020) |
Prior Year (2019) |
|
Income before provision for income taxes = 1517.9 – 353.5 = 1,164.4 Common-size percent = × 100 Common-size percent = 4.95% |
Income before provision for income taxes = 3915.7 + 550.5 = 4,466.2 Common-size percent = × 100 Common-size percent = 16.85% |
Net Income
|
Current Year (2020) |
Prior Year (2019) |
|
Net Income = 1,164.4 - 239.7 – 3.6 = 928.3 Common-size percent = × 100 Common-size percent = 3.95% |
Net Income = 4,466.2 – 871.6– 4.6 = 3599.2 Common-size percent = × 100 Common-size percent = 13.58% |
Financial Ratios
Liquidity and Efficiency Ratios
Current Ratio
Current Ratio = Current Assets/Current Liabilities
|
Current Year (2020) |
Prior Year (2019) |
|
Current Ratio = 7,806.4/7,346.8 = 1.06 |
Current Ratio = 5,653.9/6,168.7 = 0.92 |
Quick Ratio
Quick Ratio = (Current Assets - Inventories)/ Current liabilities
|
Current Year (2020) |
Prior Year (2019) |
|
Quick Ratio = (7,806.4 – 1551.4)/7,346.8 = 0.85 |
Quick Ratio = (5,653.9- 1,529.4)/6,168.7 = 0.67 |
Account Receivable Turnover
Receivable turnover = Revenue/ Average accounts receivables
|
Current Year (2020) |
Prior Year (2019) |
|
Receivable turnover = 23,518.0/883.4 = 26.62 times |
Receivable turnover = 26,508.6/879.2 = 30.15 times |
Inventory Turnover
Inventory Turnover = Cost of Goods Sold/ Average Inventory
|
Current Year (2020) |
Prior Year (2019) |
|
Receivable turnover = 7694.9/1551.4 = 4.96 times |
Receivable turnover = 8526.9/1,529.4 = 5.58 times |
Days Sales Uncollected
Collection period = 365/ Receivable Turnover Ratio
|
Current Year (2020) |
Prior Year (2019) |
|
Collection Period = 365/4.96 = 73.59 days |
Collection Period = 365/5.58 = 65.41 days |
Total Asset Turnover
Total Asset Turnover = Total Sales/ Average Total Assets
|
Current Year (2020) |
Prior Year (2019) |
|
Total Asset Turnover = 23,518.0/29,374.5= 0.80 |
Total Asset Turnover = 26,508.6/19,219.6 = 1.38 |
Solvency Ratios
Debt Ratio
Debt Ratio = Total Debt/ Total Assets
|
Current Year (2020) |
Prior Year (2019) |
|
Debt Ratio = (438.8 + 14,659.6)/29,374.5 = 0.51 |
Debt Ratio = (0 + 11,167.0)/19,219.6 = 0.58 |
Equity Ratio
Equity Ratio = Total Equity/ Total Assets
|
Current Year (2020) |
Prior Year (2019) |
|
Equity Ratio = 7,799.4/29,374.5 = 0.27 |
Equity Ratio = 6,231.0/19,219.6= 0.32 |
Debt-to-Equity Ratio
Debt-to-Equity Ratio = Total Debt/ Total Equity
|
Current Year (2020) |
Prior Year (2019) |
|
Debt-to-Equity Ratio= (438.8 + 14,659.6)/7,799.4= . 1.94 |
Debt-to-Equity Ratio = (0 + 11,167.0)/6,231.0= 1.79 |
Times Interest Earned
Times Interest Earned = earnings before interest and taxes (EBIT)/interest expenses
|
Current Year (2020) |
Prior Year (2019) |
|
Time Interest Earned= 1,164.4/437.0 = 2.66 |
Times Interest Earned = 4466.2/331.0 = 13.49 |
Profitability Ratios
Profit Margin
Profit Margin = Net Income/ Revenue
|
Current Year (2020) |
Prior Year (2019) |
|
Profit Margin = 928.3/23518.0 = 0.039 |
Profit Margin = 3599.2/26508.6 = 0.1358 |
Gross Margin
Gross Margin = Total Net Revenue – Cost of Goods Sold/ Total Net Revenue
|
Current Year (2020) |
Prior Year (2019) |
|
Gross Margin = 5,059.1/23,518.0 = 0.22 |
Gross Margin = 7,488.1/26508.6 = 0.28 |
Return on Total Assets
Return on Total Assets = Net Income/ Total Average Assets
|
Current Year (2020) |
Prior Year (2019) |
|
Return on Total Assets = 928.3/29,374.5 = 0.032 |
Return on Total Assets = 3599.2/19,219.6= 0.187 |
Basic Earnings Per Share
Basic Earnings Per Share = Net Income – Preferred Dividend/ Weighted Average Common Shares Outstanding
|
Current Year (2020) |
Prior Year (2019) |
|
Basic Earnings per Share= 928.3/1172.8= 0.79 |
Basic Earnings per Share= 3599.0/1221.2= 0.187 |
Market Prospects Ratios
Price-Earnings Ratio
Price-Earnings Ratio = Market Price Per Common Share/ Earnings Per Share
|
Current Year (2020) |
Prior Year (2019) |
|
Price-Earnings Ratio = 83.74/0.79 = 106 |
Price-Earnings Ratio = 72.35/2.95= 24.53 |
Dividend Yield Ratio
Dividend Yield Ratio = Annual Cash Dividend Per Share/ Market Price Per Common Share
|
Current Year (2020) |
Prior Year (2019) |
|
Dividend Yield Ratio = 1.23/83.74= 0.015 |
Dividend Yield Ratio = 1.49/72.35 = 0.021 |
References
Drake, P. P., & Fabozzi, F. J. (2012). Analysis of financial statements (Vol. 204). John Wiley & Sons.
Starbucks. (2019). Starbucks Fiscal 2019 Annual Report. https://s22.q4cdn.com/869488222/files/doc_financials/2019/2019-Annual-Report.pdf
Starbucks. (2020). Starbucks Fiscal 2020 Annual Report. https://s22.q4cdn.com/869488222/files/doc_financials/2020/ar/2020-Starbucks-Annual-Report.pdf
