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Starbucks Corporation 3rd Company Report

In: Business and Management

Submitted By anniedinh
Words 1001
Pages 5
Back Ground:

Starbucks Corporation is the sector called Specialty eateries. It largest competitors are, PANERA BREAD, DIEDRICH COFFEE, and FLANIGAN'S ENTERPRSE INC. With Starbucks having more than 10 times the sales of its nearest competitor.
An overview perspective shows that Starbucks is just slightly below the industry average in most categories. This is a negative aspect in some ratios such as current ratio but could be considered a positive in other ratios such as the Debt ratio.

Analysis:
The purpose of this report is to compare the market value of the securities for the Starbucks Corporation and compare this with the calculated financial figures from the financial statements, taking into consideration, the different types of debt the company owes, the preferred stock and common stock rights to the company.
Evaluate your company debt, preferred stock and common stock as follows:

a. Find the value (how much it is worth) of each issue separately (debt, if it has more than one kind of debt make sure to do each separately, etc).. b. Obtain the market value of these securities (that is how much they sell for) use sources such as the Wall Street Journal.

LONG TERM DEBT:
Given:

Starbucks does not issues bonds; however for purposes of illustration we will assume that off it’s long term debt is issued as a bond that matures in 2011
Yield to Maturity Y= Annual interest payment+ (Principal payment – Price of Bond)

Number of years to maturity .(06*Price of the bond)+(.4*Principal Payment)

Price of Bond= $5,100,000
Principal Payment= $5,425,530
Annual Interest payments $331500
Number of Years to maturity 8
Formula: = =(D4+(D3-D2)/D5)/((0.6*D2)+(0.4*D3))
| |B |C |D |
|1 | Price of bond | | $ 5,100,000.00 |
|2 | Principal

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