Neo-Confucianism Is a Philosophy Which Was Born TEST1 Essay

Excerpt from Essay :

Accounting

Comparison of Starbucks and the Dunkin Brands - Revenue, Cost of Sales, Accounts Receivable and Payable and Inventory

Starbucks is a well-known coffee house which operates using both company owned outlets as well as utilizing a franchise model. The firm has been successful, but has also faced challenges. The firm has shown significant growth since the humble origins in 1971, when the firm had only a single store, to the position where in 2011 the firm has more than 17,000 outlets in 55 different countries (Starbucks, 2011). While the growth may be impressive, it is the financial performance that accompanies that growth which will be of interest to investors or potential investors. The investors may want to look at the firms' performance and assess the degree to which the investment is sound. This can include many ratios and measures, in this case the aspect of soundness may be considered by looking at ratios and trends concerning revenue, cot of goods sold, accounts receivable and payable and inventory. The investor will look at the firm, but may also compare the firm to another in the same industry. Therefore, when looking at Starbucks a comparison will be made with the Dunkin Group, a company with a similar profile, which also uses company owned stores and franchises and sells food and beverages.

The first consideration is the revenue and the pattern shown in growth or decline,

Table 1 Revenue growth 2009-2011

2009

2010

2011

Starbucks revenue

9,775

10,707

11,700

Starbucks revenue growth

-5.86%

9.53%

9.27%

Dunkin revenue

Dunkin revenue growth n/a

3.53%

12.93%

In 2009 Starbucks had a slow down in growth; unsurprising due to the global recession. However, there is ongoing growth in 2010 and 2011. At Dunkin there is also…

Sources Used in Document:

80.29%

From this it is possible to see that the cost of goods sold to Starbucks is much higher than to Dunkin Group, however, this is not necessarily negative, as it reflects the type of goods sold. However, it does demonstrate potential fore Dunkin to translate this into a higher net profit is other costs can be controlled. The gross profit for Starbucks shows a slight decrease in 2011 compared to 2010, but with inflation on goods inwards and difficult financial conditions making firms wary increase prices this minimal decrease in the gross profit as a result in the slight proportional increase in cost of goods sold is not cause for concern. However, Dunkin have been able to increase their gross profit margin.

The cash flow may be considered when looking at the accounts receivable and payable. The accounts receivable are the amounts that the firm is owed at any period of time.

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