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Starbucks Horizontal and Vertical Analysis

By:   •  July 19, 2019  •  Research Paper  •  349 Words (2 Pages)  •  2,433 Views

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Overall report of Starbucks Horizontal and vertical analysis of Income statement and Balance sheet.

In 2018 Starbucks did a great job, with a 56.6% increase in profits. Starting with a 20.4% decrease in accounts receivable, a 68.2% increase in total assets, and a 10.4% increase in sales all was a great start in making up for an increase in cost of goods sold, operating expense, and interest expense. With an increase in sales I would expect an increase in cost of goods sold, the issue here is sales increased by 10.4%, however cost of goods sold increased by 12.6%. To maximize profits and dividends to the owners it is not a good sign to see cost increase by a higher percentage than sales. Another cause for concern was that gross profit only increased by 9% which is close to the 10.4% increase I noticed in sales but not quite and the difference in the higher increase in the cost of sales took away from the gross profit. In 2018 Starbucks seems to have make major expansion plans due to the huge increase in interest cost, the increase in total assets, total liabilities and long-term debt. Expanding is a great sign that a company is doing well


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