starbucks 2008 financials
Starbucks Financial Health?
How was Starbucks Corporations financial health for year 2008? Is there any worrisome information on their financial statements?
Financial statements located at:http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?symbol=sbux
The following was noted:
1. GP margin fell to 19% from a fairly steady 23 to 25% in the previous 4 yrs.
2. Turnover for 2008 was its highest in the last 5 years. Coupled with the above, it would mean that the GP margin fell because costs rose at a higher rate than turnover.
3. There was an unusual expense in 2008 of $266.9m which didn’t exist in the previous 4 years. You need to read the notes to find out and write about what this unusual expense was.
4. Because of all the above, net income in 2008 was at its lowest in the 5 years posted, and less than half that of 2007’s.
5. Other current liabilities at $597m is also at the highest of the 5 years posted. You need to look into the composition to find out why.
6. Even if the company had not incurred the unusual expense, the net income is still lower than 2007’s. Unless it can find ways to control its costs, even if turnover continues to increase in 2009, it might still find its net income sliding downward.
NYC Trip – Starbucks in the Financial District of NYC
