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Starbucks Corp  (NAS:SBUX) Return-on-Tangible-Asset: 22.45% (As of Jun. 2017)

Return on tangible assets is calculated as Net Income divided by its average total tangible assets. Total tangible assets equals to Total Assets minus Intangible Assets. Starbucks Corp's annualized Net Income for the quarter that ended in Jun. 2017 was $2,766 Mil. Starbucks Corp's average total tangible assets for the quarter that ended in Jun. 2017 was $12,322 Mil. Therefore, Starbucks Corp's annualized return on tangible assests (ROTA) for the quarter that ended in Jun. 2017 was 22.45%.

NAS:SBUX' s Return-on-Tangible-Asset Range Over the Past 10 Years
Min: 0.09   Max: 27.65
Current: 23.62

0.09
27.65

During the past 13 years, Starbucks Corp's highest Return on Tangible Assets (ROTA) was 27.65%. The lowest was 0.09%. And the median was 19.07%.

NAS:SBUX's Return-on-Tangible-Asset is ranked higher than
94% of the 324 Companies
in the Global industry.

( Industry Median: 4.54 vs. NAS:SBUX: 23.62 )

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Starbucks Corp Annual Data

Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16 Sep17
Return-on-Tangible-Asset Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 0.09 20.68 27.65 25.14 23.57

Starbucks Corp Quarterly Data

Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
Return-on-Tangible-Asset Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 27.04 25.02 21.69 22.45 25.33

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

Starbucks Corp's annualized Return on Tangible Assets (ROTA) for the fiscal year that ended in Sep. 2017 is calculated as:

ROTA=Net Income/( (Total Tangible Assets+Total Tangible Assets)/ 2 )
(A: Sep. 2017 )  (A: Sep. 2016 )(A: Sep. 2017 )
=Net Income/( (Total Assets - Intangible Assets+Total Assets - Intangible Assets)/ 2 )
(A: Sep. 2017 )  (A: Sep. 2016 )(A: Sep. 2017 )
=2884.7/( (12093.6+12385)/ 2 )
=2884.7/12239.3
=23.57 %

Starbucks Corp's annualized Return on Tangible Assets (ROTA) for the quarter that ended in Jun. 2017 is calculated as:

ROTA=Net Income/( (Total Tangible Assets+Total Tangible Assets)/ 2 )
(Q: Jun. 2017 )  (Q: Mar. 2017 )(Q: Jun. 2017 )
=Net Income/( (Total Assets - Intangible Assets+Total Assets - Intangible Assets)/ 2 )
(Q: Jun. 2017 )  (Q: Mar. 2017 )(Q: Jun. 2017 )
=2766.4/( (12124.4+12518.8)/ 2 )
=2766.4/12321.6
=22.45 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

In the calculation of annual return on tangible assets, the net income of the last fiscal year and the average total tangible assets over the fiscal year are used. In calculating the quarterly data, the Net Income data used here is four times the quarterly (Jun. 2017) net income data.


Explanation

Return on tangible assets (ROTA) measures the rate of return on the average total tangible assets (total assets minus intangible assets). Tangible means physical in nature. Intangible Assets are assets that are not physical in nature, and typically "derive their value from legal or intellectual rights." ROTA measures a firm's efficiency at generating profits from its tangible assets. ROTA shows how well a company uses what it has to generate earnings. ROTAs can vary drastically across industries. Therefore, return on tangible assets should not be used to compare companies in different industries.


Be Aware

Like ROE and ROA, ROTA is calculated with only 12 months data. Fluctuations in the company’s earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROTA can be affected by events such as stock buyback or issuance, and by a company’s tax rate and its interest payment. ROTA may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).

Many analysts argue the higher return the better. Buffett states that really high ROTA may indicate vulnerability in the durability of the competitive advantage.


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