Ratio Analysis Of Starbucks

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In regards to the corporation’s balance sheet, it is necessary to place an importance on liquidity ratios to demonstrate the company’s ability to pay its short term obligations such as accounts payable and notes that have a duration of less than one year. These commonly used liquidity ratios include the current ratio, quick ratio, and cash ratio. All three ratios are used to measure the liquidity of a company or business. The current ratio is used to indicate a business’s ability to meet maturing obligations. The quick ratio is used to indicate the company’s ability to pay off debt. Finally the cash ratio is used to measure the amount of capital as well short term counterparts a business has over its current liabilities. When looking …show more content…

As shown in this exhibit Dunkin Brand Group currently has $3,177,383,000 in total assets; $2,809,424,000 in total liabilities; and $367,959,000 in shareholder’s equity. Starbucks has total assets of $12,446,100,000; $6,628,100,000 in total liabilities; and $5,818,000,000 in shareholder’s equity. McDonald’s has the highest total assets as well as total liabilities and shareholder’s equity of the three competitors. The company 's total assets of $34,281,400,000; $21,428,000,000 in total liabilities; and $12,853,400,000 in shareholder’s equity. The balance sheet is a financial statement that is used to report the financial position of a company in its fiscal year. With these three competitors, it is clear that McDonald 's is the largest of the three and has both the most assets and …show more content…

Each competitor 's current ratio, quick ratio, and cash ratio are able to be found in this exhibit for the year ended in 2015. McDonald’s currently has a cash ratio of 0.76, a quick ratio of 1.20, and a 1.52. Starbucks has a cash ratio of 0.44, a quick ratio of 0.64, and a current ratio of 1.19. Finally, the Dunkin Brand Group Inc. has a cash ratio of 0.59, a quick ratio of 0.74, and a current ratio of 1.25. When looking at these ratios one is able to find that compared to its competitors, Starbucks is less liquid than McDonald 's and Dunkin Brand Group

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