Starbucks Financials
Autor: seekersingh4all • December 31, 2015 • Coursework • 703 Words (3 Pages) • 704 Views
Starbucks Financials
It’s been around two and a half years now since Starbucks started operations in India. They started their business by investing INR 720 Cr and are off to a very exciting start with almost a trebled per store revenue than that of its competitors. With the latest financial figures available, Starbucks have reported revenue of around INR 95.4 Cr at the end of Mar 2014. With a total number of around 70 stores in India this comes as a 1.35 Cr per store revenue for Tata Starbucks. At the same time Barista and Costa Coffee seems to have lost their customer base to Starbucks and have reported decline in their revenues.
Café Coffee Day still continues to enjoy the superior position in Coffee retail market as Starbucks unsettles other players of the game. Barista and Costa Coffee have lost around 10% of their revenue within a year of Starbucks presence in India. Future years will be an interesting time to see how this trend goes and what strategies competitors bring in to face the challenge.
Profitability is still a challenge to all Coffee retailers in India and they are still to report profits on their financial reports. As these companies have not yet gone public we have collected data from various sources and tried to put together a competitive analysis of their financial position.
Financial Ratios
While Café Coffee holds the superior position in EPS ratio, Barista Coffee reports a negative value for shareholders. Tata Starbucks still has time to improve on this as their investors would give them enough time to expand their operations in the market.
Margin ratio for EBIT indicate that Starbucks took a huge negative leap in first year of their operations and with the end of year 2014 they normalized to the level where Café Coffee day functions day. With Starbucks being at a nascent stage it is understood that they will have earnings getting offset with the huge expenditure they have to incur during the initial setup. They will have time to make up for that. Barista shows a symmetry with Café Coffee Day in their data and continue to report negative figure in EBIT.
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