The review of Net Profit Marginwitnessed a fluctuating trend. The Net Profit Margin moved from 13.58% in 2019 to 11.46% in 2023.
The average EBIT Margin for the period under analysis was 15.22%, with 2020 and 2021performing the worst and best, respectively.
In the current year, Starbucks was able to cover its interest liabilities 11.07 times – compared to 2019 when it was 14.51 times.
The Asset turnover stood at1.26 times in 2023 from 1.36in 2019,implying a low performance on Assets of the business in relation to revenue.
Profitability
The revenue of Starbucks has fluctuated year on year. The revenue decreased by –11.28% between 2019 and 2020 and a further10.98% increase was recorded between 2021 and 2022. There also occurred adecrease of 11.55% between 2022 and 2023 (the current period).
Starbucks performance in profitability looks good as the return on capital employed also recorded good performance during the period of analysis.
Liquidity
The company’s result in liquidity looks poor, as current ratio decreased from 0.78:1 to 0.70:1 on the last year. Which implies that the company does not have enough assets to settle its current liabilities.
Capital Structure
Starbucks is both equity and debt financed.
The debt-to-equity (D/E) ratio has been increasing year on year. The gearing position of the company appears to be low as it stood at -284% in the current year.