Starbucks Corp. (NASDAQ:SBUX)

The review of annual financial performance reveals notable variations in return ratios over the analyzed periods. The Return on Assets (ROA) demonstrates a significant increase from 3.16% in 2020 to a peak of 14.01% in 2023, indicating an improved efficiency in asset utilization to generate profit. However, following this peak, there is a decline to 12% in 2024 and a further reduction to 5.8% in 2025, suggesting a decrease in asset profitability during the most recent years.

The absence of data for Financial Leverage and Return on Equity (ROE) restricts the analysis of capital structure impact and shareholder returns over time. Consequently, it is not possible to evaluate the extent of debt influence on equity returns or to confirm the overall trends in company profitability from an equity perspective.

Return on Assets (ROA)

Started at 3.16% in 2020, rose sharply to 13.38% in 2021, and remained elevated above 11% through 2023.

Declined materially to 12% in 2024 and further to 5.8% in 2025, indicating potential challenges in maintaining asset efficiency.

Financial Leverage

Data not available, preventing assessment of the company's use of debt financing over time.

Return on Equity (ROE)

Data not available, limiting insight into the overall profitability from shareholder perspective.

In summary, the company exhibited a strong improvement in asset-based profitability up to 2023, followed by a noticeable downturn in the subsequent years. The lack of leverage and equity return data limits a comprehensive understanding of financial strategy and equity returns. Further data acquisition is recommended for an integrated analysis involving capital structure effects on profitability.

The financial data reveals important trends in profitability and operational efficiency over the examined periods. The net profit margin exhibits fluctuations, peaking notably in the period ending October 3, 2021, at 14.45%, followed by a decline to 4.99% in the latest period ending September 28, 2025. This suggests variability in profitability relative to sales, with a general downward trend in the most recent years.

The asset turnover ratio shows an overall improvement from 0.8 in the earliest period to values exceeding 1.0 in subsequent years, indicating enhanced efficiency in utilizing assets to generate revenue. The ratio rose steadily from 0.8 to 1.22 by the period ending October 1, 2023, before slightly decreasing but maintaining an above one level through the latest reported period. This points to better asset utilization and operational management.

There are no available data points for financial leverage or return on equity (ROE), limiting the ability to assess the company’s use of debt financing and overall shareholder returns. This gap restricts a comprehensive understanding of capital structure and equity profitability trends.

Profitability

The net profit margin peaked at 14.45% in 2021, then declined steadily to 4.99% by 2025, indicating decreased profitability relative to revenues over recent years.

Operational Efficiency

Asset turnover improved from 0.8 to a peak of 1.22 in 2023 and remained stable thereafter, demonstrating increased efficiency in asset utilization.

Data Gaps

Missing figures for financial leverage and ROE prevent analysis of leverage impact and returns to equity holders.

The financial data reveals several notable trends over the analyzed periods.

Tax Burden

The tax burden ratio shows a gradual decline from 0.79 in 2020 to 0.74 in 2025. This indicates a decreasing proportion of earnings being paid as tax, which may contribute positively to net profitability over time.

Interest Burden

The interest burden ratio increased sharply from 0.73 in 2020 to above 0.9 in 2021 and remained approximately stable around 0.9 until a decline to 0.82 in 2025. This trend suggests an initial improvement in operating income available after interest expenses, followed by some increase in interest impact in the final year.

EBIT Margin

There is significant volatility in EBIT margin during the period. The margin surged from 6.82% in 2020 to a peak of 20.05% in 2021, then declined to 8.2% by 2025. The initial increase reflects improved operational profitability likely driven by either revenue growth or cost control, whereas the subsequent decline indicates rising costs or margin compression challenges in recent years.

Asset Turnover

Asset turnover steadily improved from 0.8 in 2020 to a high of 1.22 in 2023, followed by a slight decrease and stabilization around 1.15–1.16 in 2024 and 2025. This pattern shows more efficient use of assets to generate revenue initially, with a plateau suggesting stabilization in operational efficiency.

Financial Leverage & Return on Equity (ROE)

Data for financial leverage and return on equity is missing, limiting the ability to assess capital structure impact and shareholders’ profitability comprehensively.

Overall, the company experienced improvements in tax efficiency and asset utilization. The interest burden improved markedly early on but worsened slightly toward the end of the period. Operating profitability reached a high point in 2021 but faced a downward trajectory afterward. The incomplete data on leverage and ROE constrains a full appraisal of financial risk and return trends.

The analysis of the financial ratios over the six-year period reveals notable fluctuations in profitability and efficiency metrics.

Net Profit Margin

The net profit margin exhibited significant variability. It started at a modest 3.95% and saw a remarkable increase, peaking at 14.45% in the second year. Subsequently, the margin experienced a decline, with some recovery in the following years, but ultimately dropped to 4.99% by the most recent period. This trend suggests a peak in profitability early in the observed timeframe, followed by challenges in maintaining those high profit levels.

Asset Turnover

This ratio, reflecting the efficiency in utilizing assets to generate revenue, showed a generally positive trend. Beginning at 0.8, it increased steadily and reached a high of 1.22 in the fourth period, before stabilizing around 1.15 to 1.16 in the later years. This indicates an improvement in asset usage efficiency over time, with a relatively stable performance in recent periods.

Return on Assets (ROA)

The ROA mirrored the pattern observed in net profit margin to some extent. Starting low at 3.16%, it rose sharply to 13.38% the following year and then fluctuated in the range between 11.73% and 14.01%. In the last two years, ROA showed a marked decline, falling to 5.8%, possibly reflecting lower profitability and/or increased asset base not being matched by profit growth. The overall trend points to initial strong returns on assets, followed by a downturn in later years.

In summary, the company's financial efficiency and profitability metrics have demonstrated considerable variability. While asset turnover improved and stabilized at a higher level, profitability ratios such as net profit margin and ROA showed a peak early on but have since trended downward, indicating potential challenges in sustaining profitability despite efficient asset utilization.

Tax Burden

The tax burden ratio demonstrates a gradual decline over the examined periods, moving from 0.79 to 0.74. This trend suggests a slight decrease in the proportion of earnings retained after taxes, potentially indicating improved tax efficiency or changes in tax regulations impacting the company.

Interest Burden

This ratio shows an initial improvement from 0.73 to above 0.9 between 2020 and 2021, remaining relatively stable around 0.9 through 2024 before dipping to 0.82 in 2025. The overall trend suggests a generally stable ability to cover interest expenses with some weakening in the latest year under review.

EBIT Margin

The EBIT margin exhibits notable variability, peaking in 2021 at 20.05% before decreasing to 8.2% in 2025. Despite fluctuations, margins remained stronger in the early years but declined significantly toward the latter period, indicating potential pressure on operating profitability, higher operating costs or revenue challenges.

Asset Turnover

Asset turnover showed a continuous positive trend from 0.8 in 2020 to about 1.16 by 2025, indicating the company's increasing efficiency in generating revenue from its assets. The highest point occurred in 2023 with 1.22, demonstrating an improvement in asset utilization which slightly moderated in subsequent years.

Return on Assets (ROA)

ROA increased sharply from 3.16% in 2020 to a peak of 14.01% in 2023, reflecting enhanced overall profitability in relation to asset base. However, a decline to 5.8% by 2025 signals a reduction in earnings efficiency, mirroring the trends observed in EBIT margin and interest burden towards the end of the period.

The analysis of the company's financial ratios over the periods from 2020 to 2025 reveals several noteworthy trends and shifts in operational efficiency and profitability.

Tax Burden

The tax burden ratio shows a gradual decline from 0.79 in 2020 to 0.74 in 2025. This downward trend suggests an improving tax efficiency or potentially favorable changes in tax-related factors impacting earnings over the years.

Interest Burden

The interest burden ratio experienced significant variation, initially rising from 0.73 in 2020 to a peak around 0.92 in 2021, maintaining relatively high levels through 2024 and then decreasing to 0.82 in 2025. The increase in the first years may indicate higher interest expenses or financial leverage, subsequently alleviated somewhat by 2025.

EBIT Margin

The earnings before interest and taxes (EBIT) margin demonstrated considerable volatility, peaking at 20.05% in 2021, followed by a decline to 8.2% by 2025. This suggests fluctuations in operational profitability, with significant contraction in the most recent year, indicating potential challenges in core earnings before financing costs.

Net Profit Margin

Similarly, the net profit margin showed an increase from 3.95% in 2020 to 14.45% in 2021, then a general downward movement to 4.99% in 2025. The high margins in the early part of the period were not sustained, with the sharp decline by 2025 reflecting reduced overall profitability, possibly related to increased costs or subdued revenue growth.

Overall, the data indicates that while the company experienced strong improvements in profitability ratios during the early years analyzed, recent periods reveal a contraction in both EBIT and net profit margins. The declining tax burden ratio over time may partially offset pressures on net profitability, but the rise and subsequent decrease in interest burden ratios suggest variable financing costs or capital structure changes affecting the bottom line. These trends highlight the importance of closely monitoring operational efficiencies and financial expenses to sustain profitability moving forward.