Starbucks Financial Statement Analysis

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Financial Statement Analysis Starbucks Vs. Caribou Coffee By: Dan Polak 2/21/11 Which is the better investment? When choosing a company to invest in, it is best to avoid brand name bias and choose the company that, according to its books, is the most efficient and profitable. While Starbucks is the famous brand name, it is also clearly the better company. Not only is it the international fresh brew behemoth, but, year by year, it never ceases to prove just how much the world, especially Americans, love their fresh cup of coffee and how much they’re willing to pay for it. When analyzing the four financial statements, it is easy to see that Starbucks triumphs over Caribou in almost any statistic or ratio. Starbucks has a much higher net income and a profit margin, while Caribou owes a lot more money. Caribou is the smaller company and therefore, has a smaller net income, but Starbucks has a better costs of goods sold to net income ratio, which means that they make more money while spending less. In Caribou’s management’s analysis, it is stated that Caribou is the second largest coffeehouse operator in the United States and it is fair to assume that it is trailing behind Starbucks. Starbucks also finished the previous financial year with no short-term debt and repaid a lot of its long-term debt. I would invest in Starbucks over Caribou, because of its status as the largest coffee maker in the world, its solid financials, and its efficiency. They cut down production costs, while maximized profits and still returned $460 million back to shareholders through dividends and share repurchases. Financial Ratios Explanation of Ratios Management Discussion and Analysis Common Sized Financials Financial

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