Stock Analysis on Net
Stock Analysis on Net

Starbucks Corp. (NASDAQ:SBUX)

Analysis of Goodwill and Intangible Assets

Microsoft Excel LibreOffice Calc

Goodwill and Intangible Asset Disclosure

Starbucks Corp., balance sheet: goodwill and intangible assets

US$ in thousands

Microsoft Excel LibreOffice Calc
Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017 Oct 2, 2016 Sep 27, 2015
Acquired and reacquired rights 1,116,100  1,075,000  1,081,700  328,800  361,300  308,600 
Acquired trade secrets and processes 27,600  27,600  27,600  27,600  27,600  27,600 
Trade names, trademarks and patents 124,800  40,600  33,000  31,500  29,400  24,500 
Licensing agreements 16,600  16,200  14,300  14,400  16,000  13,400 
Other finite-lived intangible assets 22,800  22,000  25,600  6,700  7,200  6,500 
Finite-lived intangible assets, gross carrying amount 1,307,900  1,181,400  1,182,200  409,000  441,500  380,600 
Accumulated amortization (850,800) (603,000) (371,000) (194,800) (148,100) (78,100)
Finite-lived intangible assets, net carrying amount 457,100  578,400  811,200  214,200  293,400  302,500 
Trade names, trademarks and patents 95,000  203,400  215,900  212,100  207,800  202,800 
Other indefinite-lived intangible assets —  —  15,100  15,100  15,100  15,100 
Indefinite-lived intangible assets 95,000  203,400  231,000  227,200  222,900  217,900 
Other intangible assets 552,100  781,800  1,042,200  441,400  516,300  520,400 
Goodwill 3,597,200  3,490,800  3,541,600  1,539,200  1,719,600  1,575,400 
Other intangible assets and goodwill 4,149,300  4,272,600  4,583,800  1,980,600  2,235,900  2,095,800 

Based on: 10-K (filing date: 2020-11-12), 10-K (filing date: 2019-11-15), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12).

Item Description The company
Other intangible assets Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Starbucks Corp.’s other intangible assets decreased from 2018 to 2019 and from 2019 to 2020.
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Starbucks Corp.’s goodwill decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.
Other intangible assets and goodwill Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Starbucks Corp.’s other intangible assets and goodwill decreased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Goodwill

Starbucks Corp., adjustments to financial statements

US$ in thousands

Microsoft Excel LibreOffice Calc
Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017 Oct 2, 2016 Sep 27, 2015
Adjustment to Total Assets
Total assets (as reported) 29,374,500  19,219,600  24,156,400  14,365,600  14,329,500  12,446,100 
Less: Goodwill 3,597,200  3,490,800  3,541,600  1,539,200  1,719,600  1,575,400 
Total assets (adjusted) 25,777,300  15,728,800  20,614,800  12,826,400  12,609,900  10,870,700 
Adjustment to Shareholders’ Equity (deficit)
Shareholders’ equity (deficit) (as reported) (7,805,100) (6,232,200) 1,169,500  5,450,100  5,884,000  5,818,000 
Less: Goodwill 3,597,200  3,490,800  3,541,600  1,539,200  1,719,600  1,575,400 
Shareholders’ equity (deficit) (adjusted) (11,402,300) (9,723,000) (2,372,100) 3,910,900  4,164,400  4,242,600 
Adjustment to Net Earnings Attributable To Starbucks
Net earnings attributable to Starbucks (as reported) 928,300  3,599,200  4,518,300  2,884,700  2,817,700  2,757,400 
Add: Goodwill impairment —  10,500  37,600  87,200  —  500 
Net earnings attributable to Starbucks (adjusted) 928,300  3,609,700  4,555,900  2,971,900  2,817,700  2,757,900 

Based on: 10-K (filing date: 2020-11-12), 10-K (filing date: 2019-11-15), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12).

Starbucks Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Starbucks Corp., adjusted financial ratios

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Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017 Oct 2, 2016 Sep 27, 2015
Net Profit Margin
Reported net profit margin 3.95% 13.58% 18.28% 12.89% 13.22% 14.39%
Adjusted net profit margin 3.95% 13.62% 18.43% 13.28% 13.22% 14.39%
Total Asset Turnover
Reported total asset turnover 0.80 1.38 1.02 1.56 1.49 1.54
Adjusted total asset turnover 0.91 1.69 1.20 1.75 1.69 1.76
Financial Leverage
Reported financial leverage — — 20.66 2.64 2.44 2.14
Adjusted financial leverage — — — 3.28 3.03 2.56
Return on Equity (ROE)
Reported ROE — — 386.34% 52.93% 47.89% 47.39%
Adjusted ROE — — — 75.99% 67.66% 65.00%
Return on Assets (ROA)
Reported ROA 3.16% 18.73% 18.70% 20.08% 19.66% 22.15%
Adjusted ROA 3.60% 22.95% 22.10% 23.17% 22.35% 25.37%

Based on: 10-K (filing date: 2020-11-12), 10-K (filing date: 2019-11-15), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Starbucks Corp.’s adjusted net profit margin ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Starbucks Corp.’s adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Starbucks Corp.’s adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Starbucks Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel LibreOffice Calc
Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017 Oct 2, 2016 Sep 27, 2015
As Reported
Selected Financial Data (US$ in thousands)
Net earnings attributable to Starbucks 928,300  3,599,200  4,518,300  2,884,700  2,817,700  2,757,400 
Net revenues 23,518,000  26,508,600  24,719,500  22,386,800  21,315,900  19,162,700 
Profitability Ratio
Net profit margin1 3.95% 13.58% 18.28% 12.89% 13.22% 14.39%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted net earnings attributable to Starbucks 928,300  3,609,700  4,555,900  2,971,900  2,817,700  2,757,900 
Net revenues 23,518,000  26,508,600  24,719,500  22,386,800  21,315,900  19,162,700 
Profitability Ratio
Adjusted net profit margin2 3.95% 13.62% 18.43% 13.28% 13.22% 14.39%

Based on: 10-K (filing date: 2020-11-12), 10-K (filing date: 2019-11-15), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12).

2020 Calculations

1 Net profit margin = 100 × Net earnings attributable to Starbucks ÷ Net revenues
= 100 × 928,300 ÷ 23,518,000 = 3.95%

2 Adjusted net profit margin = 100 × Adjusted net earnings attributable to Starbucks ÷ Net revenues
= 100 × 928,300 ÷ 23,518,000 = 3.95%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Starbucks Corp.’s adjusted net profit margin ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017 Oct 2, 2016 Sep 27, 2015
As Reported
Selected Financial Data (US$ in thousands)
Net revenues 23,518,000  26,508,600  24,719,500  22,386,800  21,315,900  19,162,700 
Total assets 29,374,500  19,219,600  24,156,400  14,365,600  14,329,500  12,446,100 
Activity Ratio
Total asset turnover1 0.80 1.38 1.02 1.56 1.49 1.54
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net revenues 23,518,000  26,508,600  24,719,500  22,386,800  21,315,900  19,162,700 
Adjusted total assets 25,777,300  15,728,800  20,614,800  12,826,400  12,609,900  10,870,700 
Activity Ratio
Adjusted total asset turnover2 0.91 1.69 1.20 1.75 1.69 1.76

Based on: 10-K (filing date: 2020-11-12), 10-K (filing date: 2019-11-15), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12).

2020 Calculations

1 Total asset turnover = Net revenues ÷ Total assets
= 23,518,000 ÷ 29,374,500 = 0.80

2 Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
= 23,518,000 ÷ 25,777,300 = 0.91

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Starbucks Corp.’s adjusted total asset turnover ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017 Oct 2, 2016 Sep 27, 2015
As Reported
Selected Financial Data (US$ in thousands)
Total assets 29,374,500  19,219,600  24,156,400  14,365,600  14,329,500  12,446,100 
Shareholders’ equity (deficit) (7,805,100) (6,232,200) 1,169,500  5,450,100  5,884,000  5,818,000 
Solvency Ratio
Financial leverage1 — — 20.66 2.64 2.44 2.14
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets 25,777,300  15,728,800  20,614,800  12,826,400  12,609,900  10,870,700 
Adjusted shareholders’ equity (deficit) (11,402,300) (9,723,000) (2,372,100) 3,910,900  4,164,400  4,242,600 
Solvency Ratio
Adjusted financial leverage2 — — — 3.28 3.03 2.56

Based on: 10-K (filing date: 2020-11-12), 10-K (filing date: 2019-11-15), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12).

2020 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity (deficit)
= 29,374,500 ÷ -7,805,100 = —

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity (deficit)
= 25,777,300 ÷ -11,402,300 = —

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017 Oct 2, 2016 Sep 27, 2015
As Reported
Selected Financial Data (US$ in thousands)
Net earnings attributable to Starbucks 928,300  3,599,200  4,518,300  2,884,700  2,817,700  2,757,400 
Shareholders’ equity (deficit) (7,805,100) (6,232,200) 1,169,500  5,450,100  5,884,000  5,818,000 
Profitability Ratio
ROE1 — — 386.34% 52.93% 47.89% 47.39%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted net earnings attributable to Starbucks 928,300  3,609,700  4,555,900  2,971,900  2,817,700  2,757,900 
Adjusted shareholders’ equity (deficit) (11,402,300) (9,723,000) (2,372,100) 3,910,900  4,164,400  4,242,600 
Profitability Ratio
Adjusted ROE2 — — — 75.99% 67.66% 65.00%

Based on: 10-K (filing date: 2020-11-12), 10-K (filing date: 2019-11-15), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12).

2020 Calculations

1 ROE = 100 × Net earnings attributable to Starbucks ÷ Shareholders’ equity (deficit)
= 100 × 928,300 ÷ -7,805,100 = —

2 Adjusted ROE = 100 × Adjusted net earnings attributable to Starbucks ÷ Adjusted shareholders’ equity (deficit)
= 100 × 928,300 ÷ -11,402,300 = —

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017 Oct 2, 2016 Sep 27, 2015
As Reported
Selected Financial Data (US$ in thousands)
Net earnings attributable to Starbucks 928,300  3,599,200  4,518,300  2,884,700  2,817,700  2,757,400 
Total assets 29,374,500  19,219,600  24,156,400  14,365,600  14,329,500  12,446,100 
Profitability Ratio
ROA1 3.16% 18.73% 18.70% 20.08% 19.66% 22.15%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted net earnings attributable to Starbucks 928,300  3,609,700  4,555,900  2,971,900  2,817,700  2,757,900 
Adjusted total assets 25,777,300  15,728,800  20,614,800  12,826,400  12,609,900  10,870,700 
Profitability Ratio
Adjusted ROA2 3.60% 22.95% 22.10% 23.17% 22.35% 25.37%

Based on: 10-K (filing date: 2020-11-12), 10-K (filing date: 2019-11-15), 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12).

2020 Calculations

1 ROA = 100 × Net earnings attributable to Starbucks ÷ Total assets
= 100 × 928,300 ÷ 29,374,500 = 3.16%

2 Adjusted ROA = 100 × Adjusted net earnings attributable to Starbucks ÷ Adjusted total assets
= 100 × 928,300 ÷ 25,777,300 = 3.60%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Starbucks Corp.’s adjusted ROA improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.