Post by Equity Section on Mar 30, 2013 11:51:00 GMT 5.5
Now, we'll talk about Starbucks Corporation financially. If we talk in terms of the Balance-Sheet of Starbucks of 2011-2012, this company has a negligible debt. The Interest Expense of $32.7 million which Starbucks has incurred is 5.95% of the Long-term Debt of $549.6 million is a trivial amount. Their Gross Fixed Assets have gone up by 12% to $6903.1 million as compared to 4% growth last year, which is because of the certain key acquisitions of La Boulange etc. made between 2012-13. Depreciation rate of Fixed Assets is 17.78% as compared to 19.45% in the previous year which is almost same and its able to add precious $550.3 million to the Operating Cash Flows. Overall, Net Fixed Assets are 38.52% of Gross Fixed Assets at current levels which indicates the quantum of depreciation that Starbucks enjoys and adding further to the Operating Cash Flows which aids in quick expansion plans of the company. Net Fixed Assets form 44.25% of the Total Equity of the company. Cash & Bank Balances and short-term investments form other 34% of the Total Equity of the company, which indicates towards the strong & pink health of Starbucks. Starbucks is operating on negative Working Capital of -47.2 million dollars, which has increased as compared to past years, primarily on account of higher inventories being held by the company as compared to previous years. Capital Employed of Starbucks is coming out to be $2611.7 million. From this amount, Starbucks does an Operating Profit of $2337 million, thus providing a Return on Capital Employed (RoCE) to be 115.50%. This can be seen as an improvement over the previous year RoCE of 105.34%. Cash Conversion Cycle of Starbucks has risen to 66.28 days as compared to 43.67 days in the previous year, primarily on account of higher Inventories being held by the company which can be a matter of concern.
By looking at the Annual Profit & Loss 2011-12 of Starbucks, we can see that Total Net Revenues have grown by 13.67% to $13.22 billion as compared to close to 10 percent grwoths in previous years. Operating Margins of Starbucks are to stick to the same level as that of previous years at 17.57%. Taxation rates have slightly increased to 32.75% from 31.09% in the previous year for Starbucks. Dividend pay-out ratio to that of Net Profits of Starbucks increased significantly to 40.22% as compared to 34.57% in the previous year.
Looking at the quarterly statements of December quarter 2012, the Net revenue Growth of Starbucks is around 10.59% as compared to the same quarter previous year at $3779.6 million dollars. Operating profit margins have slightly improved at 19.08% from 18.80 % previous year. Dividends form 36.84% of Net Profits as compared to 45.65% in September 2012 quarter. It seems by the look that March and June quarters are the best quarters for Starbucks.
Coming to valuations, the diluted Earnings per Share of Starbucks for the past 4 quarters is coming out to be $1.86. With Starbucks quoting around $56.95, The Price to Earnings ratio comes out to be 30.61. Add to these earnings, the Depreciation amount of $550 million which comes out to be $0.72 per share. Thus effective Operating Cash Flow for Starbucks will come out to be $2.58 per share. Now, taking this figure in terms of Price to Operating Cash Flows ratio, it'll come out ot be 22.07, which seems comfortable. Its not a coincidence that the amount of annual Depreciation per share of $0.72 in 2011-12 also matches the annual Dividend per share for the same year as the excess cash coming out through Depreciations is being given to shareholders in form of dividends. Also, Starbucks has a brilliant RoCE despite its big size.
The only negative about Starbucks Corporation is that they have entered certain businesses which are Inventories intensive which'll hurt their Cash Conversion Cycle.
By looking at the Annual Profit & Loss 2011-12 of Starbucks, we can see that Total Net Revenues have grown by 13.67% to $13.22 billion as compared to close to 10 percent grwoths in previous years. Operating Margins of Starbucks are to stick to the same level as that of previous years at 17.57%. Taxation rates have slightly increased to 32.75% from 31.09% in the previous year for Starbucks. Dividend pay-out ratio to that of Net Profits of Starbucks increased significantly to 40.22% as compared to 34.57% in the previous year.
Looking at the quarterly statements of December quarter 2012, the Net revenue Growth of Starbucks is around 10.59% as compared to the same quarter previous year at $3779.6 million dollars. Operating profit margins have slightly improved at 19.08% from 18.80 % previous year. Dividends form 36.84% of Net Profits as compared to 45.65% in September 2012 quarter. It seems by the look that March and June quarters are the best quarters for Starbucks.
Coming to valuations, the diluted Earnings per Share of Starbucks for the past 4 quarters is coming out to be $1.86. With Starbucks quoting around $56.95, The Price to Earnings ratio comes out to be 30.61. Add to these earnings, the Depreciation amount of $550 million which comes out to be $0.72 per share. Thus effective Operating Cash Flow for Starbucks will come out to be $2.58 per share. Now, taking this figure in terms of Price to Operating Cash Flows ratio, it'll come out ot be 22.07, which seems comfortable. Its not a coincidence that the amount of annual Depreciation per share of $0.72 in 2011-12 also matches the annual Dividend per share for the same year as the excess cash coming out through Depreciations is being given to shareholders in form of dividends. Also, Starbucks has a brilliant RoCE despite its big size.
The only negative about Starbucks Corporation is that they have entered certain businesses which are Inventories intensive which'll hurt their Cash Conversion Cycle.