Starbucks_Executive_Summary

Starbucks Corporation Annual Report Maria Smith, Rachel Wilson, Samar Neheme, Peter Kline, Shane Sullivan University of Phoenix Principals of Accounting ACC 280 WH10BSB07 Andre Scipio March 30, 2011 Starbucks Corporation Annual Report “Starbucks is the premier roaster and retailer of specialty coffee in the world. Starbuck’s goal is to become the leading retailer and brand of coffee in each of its target markets by selling the finest quality coffee and related products, and by providing each customer a unique Starbucks Experience. The company’s mission is to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (H. Schultz, (CEO) Starbucks Corporation, 2010). Starbucks coffee was originally founded by three associates on March 30, 1971, in Seattle Washington. Writer Gordon Bowker, English teacher Jerry Baldwin, and history teacher Zev Siegl; the three were inspired by entrepreneur Alfred Peet to sell high-quality coffee beans. “The name for Starbucks was taken from Moby-Dick; after the first mate on the Pequod, Starbuck” (B. Farfam, 2011). The first Starbucks was located at 2000 Western Avenue then it relocated to 1912 Pike Place where it remains to this day since 1971–1975. The coffee stores had the home feeling as today’s stored but mainly sold a variety of coffee drinks and teas. Entrepreneur Howard Schultz joined the company in 1982 as the company’s director of retail operations and marketing. In 1984 the first Starbucks was opened in Seattle Washington with the current coffee house look and feel. In 1985 Howard Schultz formed Starbucks Corporation.” Starbucks sells high-quality whole bean coffees, fresh, rich-brewed coffees, Italian-style espresso beverages, cold blended beverages, a variety of complementary food items, a selection of premium teas, and beverage-related accessories and equipment, primarily through Company-operated retail stores. Starbucks sells coffee, tea products, and a variety of ready-to-drink beverages” (H. Schultz, (CEO) Starbucks Corporation, 2009). The auditing firm of Starbucks is Deloitte & Touche LLP of Seattle, Washington. The ticker symbol for Starbucks Corporation is SBUX. Starbucks’ stock can be bought and sold on the NASDAQ Global Select Market. The total amount of cash and cash equivalents that the company reported at the end of its 2 most recent annual reporting periods was: FY – 10 $1,164 million, FY 09 $599.8 thousand. The company’s total current assets at the end of its 2 most recent annual reporting periods was FY – 10 $2,756.4 million, FY 09 $2035.8 million. The current assents should be presented in the following order: Cash and cash equivalents, Short-term investments – available for sale securities, Short-term investments – trading securities, accounts receivable, net, Inventories, Prepaid expenses and other current assets, Deferred income taxes, net. Starbucks fiscal year ends on the Sunday closest to September 30 of each year. In its progressive business model, Starbucks has consistently expanded brand awareness by expanding operations and fine tuning operations in the U.S. and International markets. Based on the most recent fiscal reports available, 2009 & 2008, the two largest current assets were cash and cash equivalents and inventories. Starbucks accomplishes optimal revenue growth by licensing corporate properties and other sustainable avenues. Total assets for fiscal year ending 2009 was $5,576.8 million and for fiscal year ending 2008 $5,672.6 million. By continuously streamlining and evaluating operations, Starbucks has implemented strategies to reduce overall costs. This trend is can be seen when we take a look the accounts payable sections of the corresponding fiscal reports. Total accounts payable for fiscal year ending 2009 was $267.1 million. 2008 accounts payable was $324.9 million. If we look further into the recent year end reports, Starbucks ability to galvanize resources and reduce expenditures is seen when we look at the total liabilities (does not include Shareholder’s equity). Total liabilities for the fiscal year ending 2009 were $2,531.1 million. Total liabilities for fiscal year ending 2008 were $3,181.7 million. In conclusion, if Starbucks continues forward moving momentum by increasing revenues and reducing overall costs, future fiscal reports should reflect their continued success. Starbucks two largest current liabilities have been the same for the last two reporting periods. They are Deferred Revenue, and Accrued Compensation & related costs. Deferred revenue reported $414 million for FY 10, and $388.7 million for FY 09. The Accrued Compensation reported $400 million for FY 10, and $307.5 million. (Starbucks, 2009) Starbucks reported the following numbers for their total liabilities for FY 10, and FY 09. For FY Starbucks reported $2.71 billion for their total liabilities, and $2.53 billion for FY 09. (2010) Net revenues for the last three annual reporting periods were the following. FY 10 reported net revenue of $10.7 billion, FY 09 reported $9.7 billion, and FY08 reported $10.3 billion. (2010) Starbucks reported the following number for their net income for the last three annual reporting periods. FY 10 reported $945 thousand, FY 09 reported $390 thousand, and FY08 reported $315 thousand. (2010) Starbucks had a significant change in their reported net income from FY 10 to FY 09. FY 10 had a net income of $945 thousand, and FY 09 reported $390 thousand. The difference between the two reported years is $550 thousand. (2010) Starbucks reported a slight change in net income during the reporting periods of FY 09 and FY 08. In FY 09 they reported $390 thousand in net income, and in FY 08 they reported $315 thousand. The change or difference between the two years was $75 thousand. (2010) Starbucks is a popular place among today’s society, the warm and friendly feeling keeps the customers happy, and satisfied. Starbucks is a warm and friendly place to associate with friends and family. People go to drink coffee, eat pastries, and even get a lunch out of the visit. Starbucks also provides free internet service to its clients and this makes it more pleasant for people to keep returning. Starbucks is also a place where teams of University of Phoenix come together to work on team assignments or a student’s individual assignment, and it’s practical because their locations are almost everywhere and they close late hours. “I believe life is a series of near misses. A lot of what we ascribe to luck is not luck at all. It's seizing the day and accepting responsibility for your future. It's seeing what other people don't see and pursuing that vision”. (Howard Schultz, (CEO) Starbucks Corporation) References  (2010). Starbucks CORP Income Statement. Retrieved from http://finapps.forbes.com/finapps/jsp/finance/compinfo/IncomeStatement.jsp'tkr=SBUX Starbucks. (2009). Starbucks Investor Relations. Retrieved from http://investor.starbucks.com/phoenix.zhtml'c=99518&p=irol-newsArticle&ID=1492291&highlight= (2010) Starbucks Corporation Mission Statement B. Farfan-http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/Starbucks-Coffee-Mission-Statement.htm http://www.brainyquote.com/quotes/authors/h/howard_schultz.html#ixzz1I6ByW9aE