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Starbucks Financial Strength

: 4 (As of Jun. 2022)
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Starbucks has the Financial Strength Rank of 4.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.

Starbucks's Interest Coverage for the quarter that ended in Jun. 2022 was 10.20. Starbucks's debt to revenue ratio for the quarter that ended in Jun. 2022 was 0.73. As of today, Starbucks's Altman Z-Score is 2.93.


Competitive Comparison

For the Restaurants subindustry, Starbucks's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:

* 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. Note that "N/A" values will not show up in the chart.

   

Starbucks Financial Strength Distribution

For the Restaurants industry and Consumer Cyclical sector, Starbucks's Financial Strength distribution charts can be found below:

* The bar in red indicates where Starbucks's Financial Strength falls into.



Starbucks Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

Starbucks's Interest Expense for the months ended in Jun. 2022 was $-123 Mil. Its Operating Income for the months ended in Jun. 2022 was $1,255 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Jun. 2022 was $21,485 Mil.

Starbucks's Interest Coverage for the quarter that ended in Jun. 2022 is

Interest Coverage=-1*Operating Income (Q: Jun. 2022 )/Interest Expense (Q: Jun. 2022 )
=-1*1255.4/-123.1
=10.20

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Starbucks's Debt to Revenue Ratio for the quarter that ended in Jun. 2022 is

Debt to Revenue Ratio=Total Debt (Q: Jun. 2022 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(2413.9 + 21485.2) / 32600.4
=0.73

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Starbucks has a Z-score of 2.93, indicating it is in Grey Zones. This implies that Starbucks is in some kind of financial stress. If it is below 1.81, the company may faces bankrupcy risk.

Warning Sign:

Altman Z-score of 2.93 is in the grey area. This implies that the company is under some kind of financial stress. If it is below 1.8, the company may face bankruptcy risk.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Starbucks  (NAS:SBUX) Financial Strength Explanation

The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.

Starbucks has the Financial Strength Rank of 4.


Starbucks Financial Strength Related Terms

Thank you for viewing the detailed overview of Starbucks's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


Starbucks Business Description

Starbucks logo
Address
2401 Utah Avenue South, Seattle, WA, USA, 98134
Starbucks is one of the most widely recognized restaurant brands in the world, operating more than 34,300 stores across more than 80 countries as of the end of the first quarter of fiscal 2022. The firm operates in three segments: North America, international markets, and channel development (grocery and ready-to-drink beverage). The coffee chain generates revenue from company-operated stores, royalties, sales of equipment and products to license partners, ready-to-drink beverages, packaged coffee sales, and single-serve products.
Executives
Jenkins Zabrina officer: Interim evp, general counsel C/O RETAIL OPPORTUNITY INVESTMENT CORP. 11250 EL CAMINO REAL. SUITE 200 SAN DIEGO CA 92130
Woods Gina officer: evp, Public Affairs 2401 UTAH AVENUE SOUTH #800 SEATTLE WA 98134
Conway Michael Aaron officer: group president International 18 LOVETON CIRCLE SPARKS MD 21152
Ruggeri Rachel officer: evp, cfo 2401 UTAH AVENUE SOUTH #800 SEATTLE WA 98134
Lis Angela officer: evp, chief partner officer 2401 UTAH AVENUE SOUTH EX6 SEATTLE WA 98134
Kelly John Ac officer: evp, Public Affairs 2401 UTAH AVENUE SOUTH SEATTLE WA 98134
Allison Richard E Jr director 30 FRANK LLOYD WRIGHT DR ANN ARBOR MI 48105
Mahe Isabel director ONE APPLE PARK WAY MS169:2CL CUPERTINO CA 95014
Campion Andrew director ONE BOWERMAN DRIVE BEAVERTON OR 97005
Walker Jill officer: svp chief accounting officer 2401 UTAH AVENUE SOUTH SEATTLE WA 98134
Grismer Patrick J officer: executive vice president 71 SOUTH WACKER DRIVE, 12TH FLOOR CHICAGO IL 60606
Gonzalez Rachel A officer: evp, general counsel & sec. 3150 SABRE DRIVE SOUTHLAKE TX 76092
Mutty Paul officer: svp, deputy general counsel 2401 UTAH AVENUE SOUTH #800 SEATTLE WA 98134
Brewer Rosalind G director C/O MOLSON COORS BREWING COMPANY 1225 17TH STREET, SUITE 3200 DENVER CO 80202
Knudstorp Jorgen Vig director 2401 UTAH AVENUE SOUTH SEATTLE WA 98134

Starbucks Headlines

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