Financial Analysis: Starbucks vs' Java the Hut

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Financial AnalysisStarbucksvs.Java the Hut
Introduction

• Emily
• Fredrik
• Atle
• Alejandro
• Stefano
• Terra
• Greg

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Introduction
Introduction
Overview
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Introduction
Introduction
Historical
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Introduction
Introduction
Java the Hut
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Introduction
Introduction
Forecasts
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Introduction
Introduction
Summary
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Overview

• Industry and Market
• Commodity
• Starbucks is only global chain
• Dominated by single or small chain retailers
• Global demand
• Market Elasticity

Overview
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Overview

• Coffee Industry

Overview
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Overview

• Starbucks Strategy
• High Margin Specialty Products
• Franchising
• Global Expansion

Overview
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Historical Ratios
Historical
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Historical

• Balance Sheet Proportions

Historical
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5 Year Projection

• Based on Historical Rates

Historical
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Projected Ratios
Historical
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A New CompetitorJava the Hut
Java the Hut
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Strategies

• Mimics Locations and Layout of Starbucks
• Highly Leveraged for Growth
• Cost Competitor
• Low margin, high volume

Java the Hut
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Financial Projection Assumptions

• Based on typical industry model
• Growth Pattern similar to Starbucks

Java the Hut
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Java the HutIncome Statement
Java the Hut
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Java the HutBalance Sheet
Java the Hut
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Balance Sheet Proportions
Java the Hut
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Ratios A New Competitor
Java the Hut
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Ratios A New Competitor
Java the Hut
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Starbucks Revised Forecast

• Based on entrance of strong competitor Java the
  Hut
• More pessimistic
• Sensitivity Analysis
• Revision with lower growth, margin, and profit
  than original forecast

Forecasts
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Rate Revisions toIS/Balance Sheet
Forecasts
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Revised Financial Ratios

• A more gloomy outlook

Forecasts
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Summary

• The effect of competition on strategy and
  profitability
• Impact of high/low leverage
• The value of an alternative projection

Summary
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Summary

• The effect of competition on strategy and
  profitability
• Impact of high/low Leverage
• The value of an alternative projection

Summary
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Summary

• The effect of competition on strategy and
  profitability
• Impact of high/low Leverage
• The value of an alternative projection

Summary
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Summary

• The effect of competition on strategy and
  profitability
• Impact of high/low Leverage
• The value of an alternative projection

Summary