INCOME STATEMENT
Starbucks 2008 2006 Rate of growth
Net sales 10,383.0 7,786.9 33.33%
Cost of sales 4,645.3 3,178.7 4.7% (cost/net
sale)
Gross income 5,737.7 4,608.2 24.5%
Operating 5,224.8
expenses
Operating income 512.9
Net income 315.5 581.5 -45.7%
Advantage
1. Between the year 2006 and 2008, Company Starbucks managed to
increase sales by about 33.33%. This is a very good result in such an
economic environment, this result is not easy.
2. At the same time, Starbuck’s cost of sales also raised. But it is under a
strict control.
3. In 2008, Starbuck’s gross income has raised so much-----about 24.5%. It is
almost inevitable result for Starbuck. Because of that all of component
which impact gross income is rising.
Weakness
1. We can’t see the operating expense from the income statement. But we
have reason to believe that Starbuck’s operating expenses was not so high
in 2006. In 2006, Starbucks gross income was lower than it in 2008, but it
can achieve a better net income. This is unmoral.
2. Starbucks’s net income was reduced very much. I think this is because the
management problem of Starbucks. Starbucks has so many branches
which are not easy for it to control with.
Suggestion: Starbucks can reduce its branches and improve the quality of
his business.
3. Starbucks’ profit margins reduced from 7.47% to 3.04%. If Starbucks
cannot take effective means to control its costs, his income will be
declining.
CASH FLOW STATEMENT
Sep 08 Sep 06 Rate
Net Operating Cash Flow 1,258.7 1,131.6 11.23%
Net Investing Cash Flow (1,086.6) (841.0) -29.20%
Net Financing Cash Flow (184.5) (155.3) -18.80%
Advantage
1. Starbucks’ net operating cash flow has increased by about 11.23%. This is
a good phenomenon.
Weakness
1. From Sep 06 to Sep 08, we can see that the cash flow was (CFO+CFI+CFF)
from$135.3 in 2006 to $-12.4 in2008. Which means that Starbucks didn’t
has enough fund to operate the company effectively.
2. Starbucks’ net investing cash flow was always negative, and the amount
was increased by about 29.20%. On one hand, it means that Starbucks
made a good use of its fund. But on the other hand, the increasing amount
of investment made Starbuck plunged into crisis of the shortage of funds.
3. The net financing cash flow was also reduced about 18.80%. Starbucks
met some problem on collecting money.
SUMMERY
Starbucks was not so safe like its quiet surface. The problem of raising
money; huge expenditure…. Starbucks faced with many problems. But I
believed that Starbucks will find the right way. The only thing it has to do
now was to reduce its large system which it can’t control with. By this way,
it can reduce its cost and at the same time, it will increased its profit.