Stock Analysis on Net

Starbucks Corp. (NASDAQ:SBUX)

$19.99

Economic Value Added (EVA)

Microsoft Excel

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

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Economic Profit

Starbucks Corp., economic profit calculation

US$ in thousands

Microsoft Excel
12 months ended: Oct 2, 2022 Oct 3, 2021 Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-10-01).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= × =

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Starbucks Corp. economic profit increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Net Operating Profit after Taxes (NOPAT)

Starbucks Corp., NOPAT calculation

US$ in thousands

Microsoft Excel
12 months ended: Oct 2, 2022 Oct 3, 2021 Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017
Net earnings attributable to Starbucks
Deferred income tax expense (benefit)1
Increase (decrease) in allowance for credit losses2
Increase (decrease) in stored value card liability and deferred revenue3
Increase (decrease) in equity equivalents4
Interest expense
Interest expense, operating lease liability5
Adjusted interest expense
Tax benefit of interest expense6
Adjusted interest expense, after taxes7
(Gain) loss on marketable securities
Investment income, before taxes
Tax expense (benefit) of investment income8
Investment income, after taxes9
Net income (loss) attributable to noncontrolling interest
Net operating profit after taxes (NOPAT)

Based on: 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-10-01).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance for credit losses.

3 Addition of increase (decrease) in stored value card liability and deferred revenue.

4 Addition of increase (decrease) in equity equivalents to net earnings attributable to Starbucks.

5 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

6 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =

7 Addition of after taxes interest expense to net earnings attributable to Starbucks.

8 2022 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

9 Elimination of after taxes investment income.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Starbucks Corp. NOPAT increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Cash Operating Taxes

Starbucks Corp., cash operating taxes calculation

US$ in thousands

Microsoft Excel
12 months ended: Oct 2, 2022 Oct 3, 2021 Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017
Income tax expense
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest expense
Less: Tax imposed on investment income
Cash operating taxes

Based on: 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-10-01).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Starbucks Corp. cash operating taxes increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Invested Capital

Starbucks Corp., invested capital calculation (financing approach)

US$ in thousands

Microsoft Excel
Oct 2, 2022 Oct 3, 2021 Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017
Current portion of long-term debt
Long-term debt, excluding current portion
Operating lease liability1
Total reported debt & leases
Shareholders’ equity (deficit)
Net deferred tax (assets) liabilities2
Allowance for credit losses3
Stored value card liability and deferred revenue4
Equity equivalents5
Accumulated other comprehensive (income) loss, net of tax6
Noncontrolling interests
Adjusted shareholders’ equity (deficit)
Work in progress7
Marketable securities8
Invested capital

Based on: 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-10-01).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of stored value card liability and deferred revenue.

5 Addition of equity equivalents to shareholders’ equity (deficit).

6 Removal of accumulated other comprehensive income.

7 Subtraction of work in progress.

8 Subtraction of marketable securities.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Starbucks Corp. invested capital increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Cost of Capital

Starbucks Corp., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2022-10-02).

1 US$ in thousands

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2021-10-03).

1 US$ in thousands

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2020-09-27).

1 US$ in thousands

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2019-09-29).

1 US$ in thousands

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 24.50%) =
Operating lease liability4 ÷ = × × (1 – 24.50%) =
Total:

Based on: 10-K (reporting date: 2018-09-30).

1 US$ in thousands

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (reporting date: 2017-10-01).

1 US$ in thousands

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

Starbucks Corp., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Oct 2, 2022 Oct 3, 2021 Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017
Selected Financial Data (US$ in thousands)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Carnival Corp. & plc
McDonald’s Corp.

Based on: 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-10-01).

1 Economic profit. See details »

2 Invested capital. See details »

3 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Starbucks Corp. economic spread ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

Economic Profit Margin

Starbucks Corp., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Oct 2, 2022 Oct 3, 2021 Sep 27, 2020 Sep 29, 2019 Sep 30, 2018 Oct 1, 2017
Selected Financial Data (US$ in thousands)
Economic profit1
 
Net revenues
Add: Increase (decrease) in stored value card liability and deferred revenue
Adjusted net revenues
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Carnival Corp. & plc
McDonald’s Corp.

Based on: 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-10-01).

1 Economic profit. See details »

2 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenues
= 100 × ÷ =

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Starbucks Corp. economic profit margin improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.