Starbucks is a well-known publicly traded coffee company based out of Seattle, ,
Washington. They have been in business since 1985, and while many people do not know, they
are also the parent company of other popular coffee/tea brands. Some of the brands are Teavana,
Seattle’s Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve, and Princi.
The financial statements appear to take up over seventy-five percent of the annual report,
showing the major role they play in the annual report. The annual report is to show what
decisions the company has made in the last fiscal year, and how the company has fared when
those actions were taken. Looking at the financial statements within the last fiscal year can tell if
those decisions were wise or foolish decisions.
Management does bring up the financial statements and operations in their discussion.
They are actually quite specific about what has changed in each fiscal year. It is noted that the
total net revenue’s increased 7% from the 2018 to 2019; consolidated operating income
increased to $4.1 billion in fiscal 2019 compared to $3.9 billion in fiscal 2018; Earnings Per
Share (EPS) for fiscal 2019 decreased to $2.92 from $3.24 in fiscal 2018; capital expenditures
were $1.8 billion in fiscal 2019 compared to $2.0 billion in fiscal 2018; $12 billion was returned
to shareholders in fiscal 2019 compared to $8.9 billion in fiscal 2018. Management also adds a
“Note 2: Acquisitions, Divestitures, and Strategic Alliance” section discussing different business
operations that have been sold.
I personally don’t believe this is too much information given to competitors who may be
reviewing the financial statements. Competitors may be able to see what investments work for
Starbucks and what doesn’t and follow suit, however there is no guarantee that it will work for
the competitor.
Research has found that “Annual reports are ranked as the second most important source
of information and are rated in the “important range” for communication with a company. Mack,
J., & Ryan, C. (2007). Direct communication was ranked first. Reviewing Starbucks
Consolidated Statement of Earnings, we can see the last three fiscal years have fluctuated. Fiscal
2018 was better than both fiscal 2017 and fiscal 2019. Net income for 2018 was $4,518.3
million, with fiscal 2019 dropping to $3,599.2 million. When we review the rest of the statement,
we can also see there were other costs involved with this drop. This isn’t such a significant drop
