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Starbucks and Dunkin Donuts Ratio Analysis

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Starbucks versus Dunkin Donuts – Ratios Analysis

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Starbucks Corporation targets product differentiation strategy, which appeals to coffee lovers. Their customers like the store’s atmosphere, friendly staff and welcoming interior. In addition, Starbuck is having success in the international market. So far, the corporation has opened coffeehouses in over 60 different countries, and customers know they can find Starbucks coffee house in the country they are visiting and buy their favorite coffee.
Dunkin Donuts on the other hand is focusing on cost strategy. The company’s mission is to serve a good quality coffee drink and snacks at low cost. They are successful in cutting the costs by standardizing its products, and producing more items instead of buying them from the suppliers. Dunkin Donuts presence is more noticeable in the Northeast of US, but it is constantly growing and trying to expand to the different regions. In regards to the global expansion, the corporation has over 3000 stores in 32 countries. To compare and analyze Starbucks and Dunkin Donuts’ performance, I used 2012 Annual Reports from both companies and computed the necessary ratios. Both corporations performed very well in 2012. However, based on the calculations, Starbucks’ current, quick and debt ratios are much better than Dunkin Donuts. In addition, Starbucks return on assets and times interest earned, asset turnover and inventory turnover ratios have better results than Dunkin Donuts. Therefore, overall Starbucks is performing better than Dunkin Donuts. Below is my compare analysis on both companies’ most important ratios. 1. Current Ratio measures if the company has enough liquid assets that can be changed into cash to pay the company’s current debts that are due next year. Based on the data from annual reports, Starbucks’ current ratio is 190% versus Dunkin Donuts 119%. It

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