Financial Modeling & Fundamental Analysis: Starbucks

Starbucks' business model centers on high-quality coffee, beverages, and foods, sold through company-operated and licensed stores and via channel development, with three geographic segments: North America, international, and channel development.

Explore how to perform horizontal analysis on Starbucks' financial statements, calculating year-on-year changes in revenues, EBIT, and EBITDA to identify patterns and trends.

Learn vertical analysis by expressing each line item as a percentage of a base for a given year, including gross profit margin, EBIT margin, EBITDA margin, and net profit margin.

Forecast Starbucks revenue by summing North America and international segment components. Use same-store sales growth, net new store openings, and other drivers, applying prior-year values times growth to forecast.

Forecast cost drivers for Starbucks by linking revenue to the income statement, calculating each cost component as a percentage of total revenue, and projecting operating expenses across future years.

Learn to build Starbucks working capital by constructing accounts receivable, inventories, and other current assets and liabilities, linking them to the balance sheet and income statement, and forecasting these components.

Forecast depreciation for Starbucks by breaking CapEx into seven components, applying straight-line depreciation using each component’s useful life and carrying value, and linking forecasts across years.

Forecast depreciation using a waterfall diagram for six fixed asset components, exclude land, calculate total depreciation and amortization, link to CapEx, gross, accumulated depreciation, and impact on PPE and P&L.

Learn how to link the income statement to revenue drivers and forecast revenues, cost of goods sold, operating expenses, EBIT, EBITDA, taxes, and minority interests within an interlinked financial model.

Forecast Starbucks' shareholders equity schedule by linking beginning retained deficit to net profit attributable to ownership interest, dividends paid, and share buybacks, ending retained deficit, shares, and dividends per share.

Link the cash flow statement to the balance sheet, forecast items like deferred income taxes and equity method investees, and compute net cash from operating activities.

Link and forecast the balance sheet for Starbucks, connecting current and non-current assets and liabilities, the debt schedule, and the cash flow and income statements.

Link the balance sheet's non-current liabilities and equity to the cash flow statement to forecast deferred revenue, long term debt, operating lease liabilities, stock based compensation, and proceeds from issuance.

Complete the Starbucks financial model by linking interest income to cash balances, forecasting with opening cash and interest rate, and finalizing basic and diluted earnings per share using shares outstanding.

Compute Starbucks' dcf valuation by forecasting free cash flow to the firm for five years to 2026, calculating wacc, terminal value, and enterprise and equity value to derive intrinsic price.

Explore a dcf valuation by linking explicit fcf, wacc, and terminal value to derive enterprise and per-share value, using US GDP growth benchmarks.