ACC 230 Week 5 Rough Draft Starbucks Financial Health
Summary of Starbuck’s current financial performance.
It appears that on Starbucks Income statement, the company has had a decrease in revenue by 2.25% and a pick up in cost of good sold of 2.25%. Although the gross profit margin dollars are more then the year 2007, the company has dropped 2.25%. The SG&A expense has increased which leads me to believe that the Starbuck cooperation is either putting extra effort into coming up with new product and ways to improve, or then the company can be over staffed and will need to make the necessary adjustments. The depreciation and amortization expense has increased. The increase in depreciation and amortization could be from new equipment being purchased. Operating income and operating margin have decreased; this is due to the lack of sales. I am presuming the lack of sales are due to the economical crisis our country is in. I have heard on the news that many Starbucks locations are closing down. Non-operating income and non-operating expenses have increased as well. Income before taxes appears to be extremely low, $596m less then 2007. The net income has gone down $357m from 2007. The net profit margin has went down over 4%. By looking at the income statement, it appears the company has gone down in revenue then previous years.
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