Starbucks Corp. (NASDAQ:SBUX)

Debt to Capital

The debt to capital ratio exhibits fluctuations over the observed periods. It started at 1.46 in December 2018 and peaked around 2.38 in December 2019. Following this peak, the ratio generally trended downward with some variance, settling near 1.80 by June 2025. This indicates a reduction in reliance on debt relative to the capital base in more recent periods.

Debt to Capital (Including Operating Lease Liability)

When including operating lease liabilities, the debt to capital ratio shows a more moderate and stable pattern. Initially at 1.46 in December 2018, it decreased sharply to around 1.29 by October 2021 and then remained relatively stable, fluctuating modestly between 1.38 and 1.58 through the first half of 2025. This suggests that recognizing operating lease liabilities moderates the observed debt leverage variability.

Debt to Assets

The debt to assets ratio shows moderate variation, increasing from 0.46 in December 2018 to a peak of approximately 0.58 in June and September 2020, followed by a gradual decline near 0.51 by June 2025. This indicates that the portion of assets financed through debt increased temporarily but has diminished slightly in more recent quarters.

Debt to Assets (Including Operating Lease Liability)

Including operating lease liabilities, this ratio is consistently higher, starting at 0.46 in December 2018 and rising to a peak of 0.88 in June 2020. Afterwards, it decreased modestly but remained elevated, fluctuating between 0.81 and 0.86 through the latest periods. The inclusion of lease liabilities highlights a higher leverage on asset basis throughout the timeline.

Interest Coverage

Interest coverage was stable and robust in early periods, with values around 14.49 and 14.35 in late 2019 and early 2020. It then decreased sharply to as low as 2.78 in March 2020, reflecting significant pressure on earnings relative to interest expenses, possibly due to the economic disruptions of that period. Subsequently, it improved steadily, peaking again around 13.08 in mid-2021, but declined gradually thereafter to about 7.59 by mid-2025, indicating a reduced but still adequate ability to cover interest payments.

General Observations

The overall trend indicates that leverage measures considering only traditional debt are more volatile and show greater peaks in the earlier part of the observed period. The inclusion of operating lease liabilities presents a more stable but elevated leverage profile. The interest coverage ratio's steep decline and recovery suggest episodic stress followed by normalization. Recently, leverage ratios have generally decreased or stabilized at moderate levels, while interest coverage remains sufficient though lower than peak values.

The financial data reveals several notable trends regarding the company's debt and equity situation over the analyzed quarters.

Total Debt (in thousands USD)

Total debt showed an increasing trend from December 2018 through June 2020, rising from approximately 9.13 billion to around 16.83 billion USD. Thereafter, debt levels fluctuated within the 15.9 to 16 billion USD range until April 2022. From that point onward, total debt remained mostly stable around the mid-15 billion USD level until a sharp increase in June 2025, where it rose to approximately 17.32 billion USD, representing the highest level observed in the period.

Shareholders’ Deficit (in thousands USD)

The shareholders’ deficit consistently deepened throughout the period, indicating a growing negative equity position. Starting at approximately -2.88 billion USD in December 2018, the deficit expanded markedly to nearly -8.77 billion USD by April 2022, reflecting deteriorating retained earnings or accumulated losses. After this peak negative value, the deficit somewhat improved but remained substantial, closing near -7.69 billion USD by June 2025. Notably, the deficit fluctuated within a range of roughly -7.4 billion to -8.8 billion USD post-April 2022, suggesting persistent equity challenges.

Debt to Equity Ratio

There is no explicit data provided for the debt to equity ratio; however, given the trends in total debt increasing and shareholders’ deficit deepening, it can be inferred that the debt to equity ratio would have increased or remained elevated. The continuously negative shareholders’ equity points to a distress scenario where total liabilities significantly exceed equity, resulting in a high or undefined debt to equity metric over time.

Overall, the upward trajectory in total debt coupled with a continually negative and deepening shareholders’ deficit indicates an increasing leverage risk and potential solvency concerns. The rise in total debt particularly during the early phase of 2020 coincides with global economic challenges, which may have prompted the company to increase borrowings. The gradual improvement in the shareholders’ deficit after April 2022 suggests some efforts or events that might have mitigated equity erosion, yet the deficit remains considerably negative, reflecting ongoing financial strain.

Over the observed periods, the total debt, including operating lease liability, demonstrated significant fluctuations. Initially, from the end of 2018 through 2019, there was a notable increase in total debt, reaching a peak around December 2019. This period saw a nearly doubling of the debt figure, indicating an aggressive leveraging or perhaps financing activity during this timeframe.

Subsequent quarters in 2020 showed a further increase in debt levels, continuing the upward trend until reaching a maximum near mid-2020, followed by a slight reduction towards the end of 2020. From late 2020 through early 2023, total debt levels generally stabilized within a range, fluctuating moderately but maintaining an elevated plateau compared to pre-2019 levels.

Starting in 2023 and extending into mid-2025, there is a renewed upward trend evident in total debt, with figures again rising substantially, reaching their highest recorded value by June 2025. This suggests a renewed borrowing strategy or increased lease obligations during this recent period.

Concurrently, shareholders’ deficit exhibited persistent negative values, indicating equity shortfalls throughout the entire timespan. Notably, the deficit worsened significantly starting from the end of 2018 into 2019, with the greatest negative equity observed around early 2020. While there was some reduction in the deficit magnitude in the years immediately following 2020, the deficit deepened again entering 2022 and remained substantially negative thereafter.

From 2022 to mid-2025, the deficit fluctuated within a range but showed a slight improving trend toward less negative values in some quarters, though it remained at high negative levels overall. These negative equity figures reflect ongoing financial challenges impacting net asset positions.

Although the debt to equity ratio is not explicitly calculated in the data, the combined trends of increasing debt alongside a substantial and persistent shareholders’ deficit imply extremely high leverage levels. Given the shareholders’ deficit is negative, any direct ratio calculation would likely indicate a negative or undefined leverage ratio, highlighting a distressed equity situation coupled with significant debt burden.

In summary, the financial position over the periods analyzed shows escalating leverage through debt accumulation, persistent negative equity, and periods of stabilization followed by renewed debt growth. This pattern underscores potential financial strain and the need for careful management of balance sheet risks.

Total Debt

Total debt shows an overall upward trend from late 2018 through mid-2025, starting at approximately $9.13 billion and increasing to over $17.3 billion in June 2025. Periods of rapid growth can be observed around early 2020, with a significant increase from about $11.6 billion in late 2019 to approximately $16.8 billion by mid-2020. After this peak, total debt demonstrates some fluctuation but remains elevated near this higher level, maintaining values in the range of $15.0 to $17.3 billion through 2024 and into the first half of 2025.

Total Capital

Total capital displays more volatility compared to total debt, initially starting at approximately $6.25 billion at the end of 2018. It fluctuates significantly across the quarters, with values ranging between roughly $4.17 billion and $9.29 billion in the earlier periods. Following 2021, capital values tend to stabilize somewhat but still exhibit considerable variation, generally staying between $6.4 billion and $9.6 billion. A downward trend is evident towards mid-2025, ending near $9.6 billion after several fluctuations.

Debt to Capital Ratio

The debt to capital ratio shows considerable fluctuation across the observed periods, reflecting the interplay between total debt and total capital movements. Beginning at 1.46 in late 2018, it rises sharply to peaks above 2.3 on multiple occasions, for example in late 2019 and early 2022. Ratios generally remain above 1.8 throughout the timeline, with several fluctuations between approximately 1.57 and 2.39. Notably, the ratio decreases gradually in the last two years, reaching around 1.80 by mid-2025. This suggests a relatively high leverage position with some moderation in more recent quarters.

Summary of Trends

The data reveals a consistent increase in total debt over the multi-year interval, indicating growing leverage. The higher debt levels coincide with fluctuating but generally lower total capital values, resulting in elevated debt to capital ratios over most periods. The leverage ratio peaks during certain quarters but shows signs of slight reduction towards the latest available data. These movements illustrate dynamic capital structure management, with the company maintaining a relatively high debt burden while experiencing variability in capital base. The decreased ratio in recent periods could signal efforts to improve financial stability or respond to changing market conditions.

The analysis focuses on the company's capital structure as reflected by total debt, total capital, and the debt-to-capital ratio over the presented periods.

Total Debt (including operating lease liability)

The total debt shows an overall upward trend from the end of 2018 through mid-2025, rising from approximately $9.13 billion to nearly $27.89 billion. There are fluctuations within this increasing trajectory, with notable growth especially from late 2019 through 2020, where debt escalated from around $20.63 billion to over $25 billion. After some periods of marginal decline or stabilization, the most recent values suggest continued growth in debt levels, reaching their peak by mid-2025.

Total Capital (including operating lease liability)

Total capital exhibits more volatility compared to total debt. Starting at about $6.25 billion at the end of 2018, the capital figures decreased and increased intermittently with peaks and troughs through the subsequent quarters. A significant surge is noted around late 2019, jumping from roughly $4.94 billion to $13.87 billion; however, this value is followed by fluctuations that show no sustained consistent increase or decrease. The capital tends to hover between $15 billion and $18 billion in the later periods, displaying moderate volatility but no clear long-term trend upward or downward by mid-2025.

Debt to Capital Ratio (including operating lease liability)

This ratio indicates the proportion of debt relative to the total capital structure and exhibits values mostly above 1, which signals debt exceeding recorded capital measures under these definitions. Initially, the ratio varies significantly from 1.46 up to 2.26, showing notable instability through 2018 to 2019. Post-2019, the ratio generally declines and stabilizes around the 1.4 to 1.6 range. Over the more recent periods, the debt-to-capital ratio shows a slight downward trend, moving towards 1.38 by mid-2025, suggesting a marginal decrease in relative debt burden or an improvement in capital structure balance.

In summary, the company's leverage, as measured by total debt, has increased substantially over the examined time frame while total capital has shown less consistency and moderate volatility. The debt-to-capital ratio remains above 1 throughout the periods, indicating high leverage, but it trends slightly downward in recent quarters, which could imply some improvement in capital management or adjustments in financing strategy. These observations suggest ongoing reliance on debt financing with attempts to stabilize or modestly optimize capital structure in the more recent periods.

Total Debt Analysis

Over the observed periods, total debt exhibits a generally increasing trend with some fluctuations. Beginning around 9.13 billion USD at the end of 2018, it rises steadily, peaking near mid-2020 at approximately 16.83 billion USD. Following this peak, a moderate decline is observed towards early 2023, where it stabilizes around 15 billion USD. However, a sharp increase occurs by mid-2025, reaching approximately 17.32 billion USD. This indicates cyclical borrowing patterns possibly aligned with strategic investments or operational needs.

Total Assets Analysis

Total assets show variability but an overall upward trajectory across the duration. Starting at nearly 20 billion USD at the close of 2018, assets dip during early 2019 but subsequently increase, reaching roughly 31.4 billion USD by the end of 2021. There is slight contraction in following periods, yet the asset base recovers, ending above 33.6 billion USD by mid-2025. The growth in assets suggests ongoing expansion, acquisition, or capital investments.

Debt to Assets Ratio Analysis

The debt to assets ratio reflects the proportion of debt financing relative to total assets and fluctuates between roughly 0.42 and 0.58 over the periods reviewed. Initially at 0.46, the ratio climbs to a high near 0.58 by mid-2019 and mid-2020, indicating increased leverage. It subsequently declines to approximately 0.47 by late 2021, then gradually rises again to near 0.54-0.55 levels until 2023. The most recent ratio figures suggest slight deleveraging, settling close to 0.49-0.51 by mid-2025. This pattern illustrates variable leverage strategy, balancing between debt and asset growth over time.

Summary of Financial Position Trends

The data reveals an overall trend of asset growth accompanied by periodic increases and decreases in total debt. The company maintains leverage ratios generally around the 0.5 mark, indicating a balanced approach to financing between debt and equity. Peaks in debt levels correspond with spikes in leverage ratio, while periods of asset accumulation often relate to partially reduced leverage. The final periods suggest a moderate increase in debt, but with assets growing sufficiently to keep the debt to assets ratio stable, reflecting potentially sound financial management.

The analysis of the quarterly financial data reveals several notable trends regarding the company's debt structure and asset base over the observed periods.

Total Debt (Including Operating Lease Liability)

The total debt has exhibited an overall increasing trend from December 2018 to June 2025. Starting at approximately 9.13 billion USD in December 2018, total debt rose steadily, peaking at about 27.89 billion USD by June 2025. This reflects a significant expansion in the company's obligations over this timeframe, with some fluctuations observed around late 2020 to early 2023, where debt levels slightly decreased or stabilized before rising again.

Total Assets

Total assets demonstrate variability with a general upward movement. Initially recorded around 19.98 billion USD in December 2018, assets declined modestly by March 2019, then increased, reaching a peak near 31.89 billion USD by June 2025. Despite some intermittent decreases, especially noticeable in late 2021 and early 2022, the assets have generally expanded, supporting the company's growing scale of operations.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio shows a rising trend from 0.46 in December 2018 up to a high of 0.88 by June 2020, indicating that the company increasingly relied on debt relative to its asset base during this period. After June 2020, the ratio fluctuates within a narrower range, mostly between 0.82 and 0.86, suggesting a stabilization in leverage levels. Toward the end of the observed period, a modest decline is observed, with the ratio nearing 0.83 in June 2025, signifying a slight reduction in relative debt burden.

Overall, the company has increased its total debt substantially, which has largely been accompanied by growth in total assets. The leverage ratio tripled in the early years, reflecting increased financial commitments, but subsequently stabilized, indicating controlled management of debt in relation to assets. These patterns suggest strategic borrowing potentially used to finance expansion or operational needs, while maintaining a relatively consistent leverage profile in later years.

The analysis of the quarterly financial data reveals several noteworthy trends and patterns regarding the company's assets and shareholders' deficit over the observed periods.

Total assets

The total assets exhibit variability throughout the periods with an overall increasing trend. Starting at approximately US$19.98 billion at the end of 2018, the assets experienced fluctuations, reaching a peak near US$31.39 billion by October 2021. Following this peak, there was a slight decline and stabilization around the US$28 billion to US$29 billion range through early 2023. Subsequently, assets increased again, exceeding US$33.64 billion by mid-2025. This pattern suggests phases of asset growth interspersed with moderate contractions, indicative of active asset management or shifts in operational scale.

Shareholders’ deficit

The shareholders’ deficit showed considerable volatility and remained negative throughout the periods, indicating ongoing liabilities or accumulated losses surpassing shareholders’ equity. The deficit intensified from approximately -US$2.88 billion at the end of 2018 to around -US$8.62 billion by mid-2020, demonstrating a worsening financial position during this span. After peaking, the deficit showed a trend toward reduction, improving to about -US$5.32 billion by October 2021. Nevertheless, the deficit widened once again afterward, stabilizing mostly between -US$7 billion and -US$8.5 billion through 2024 and into mid-2025, with a slight increase by June 2025 close to -US$7.69 billion. This repeated fluctuation highlights persistent challenges in restoring positive shareholders’ equity.

Financial leverage

The financial leverage ratio data is missing, which limits the direct analysis of the relationship between assets and equity or the debt level. However, given the persistent shareholders’ deficit and increasing asset base, it can be inferred that the company relies significantly on liabilities or other non-equity financing sources to support its asset structure.

In summary, the total assets demonstrated a generally upward trajectory with intermittent declines, indicating expansion in resources or investments over the years. Conversely, the shareholders’ deficit fluctuated considerably without a sustained improvement, reflecting ongoing equity challenges. The absence of financial leverage ratio data restricts deeper insights into leverage dynamics, but the trends suggest elevated liabilities relative to equity throughout the periods examined.

The earnings before interest and tax (EBIT) figures display notable fluctuations over the period analyzed. Starting at approximately 1,040,500 thousand US dollars at the end of 2018, EBIT decreased to 893,900 thousand by the first quarter of 2019, then rose sharply to peak at 1,763,300 thousand in the second quarter of 2019. This was followed by a decline and further volatility, with a significant drop to -691,200 thousand in the second quarter of 2020, indicating a period of loss. Subsequently, EBIT recovered and generally trended upward, reaching values above 1,500,000 thousand from the third quarter of 2021 onward, with some oscillations. The latest quarters show sustained levels around 1,300,000 to 1,700,000 thousand, although the figure dropped to 629,400 thousand in the first quarter of 2025 before increasing again to 961,200 thousand and 1,423,000 thousand towards mid-2025.

Interest expense steadily increased across the observed quarters, beginning at 75,000 thousand US dollars at the end of 2018 and gradually rising to amounts exceeding 140,000 thousand by late 2023 and early 2024. This trend signals an increasing cost of debt or higher borrowing levels over time. However, a slight decrease is observed in the most recent periods, where interest expense dropped to approximately 127,200 to 127,300 thousand before rising back to 142,300 thousand in the most current data point.

The interest coverage ratio, which measures the company's ability to meet interest obligations from operating earnings, shows variability largely reflecting the fluctuations in EBIT. Early data points are missing, but from the second quarter of 2019 onward, the ratio ranged broadly from above 14 times coverage down to a low near 2.78 times in the second quarter of 2020, coinciding with the negative EBIT. Following this trough, the ratio improved substantially, reaching double-digit levels consistently from late 2020 through 2024. The interest coverage ratio then shows a gradual moderate decline towards the end of the timeline, falling from above 10 times to around 7.59 times, suggesting either rising interest expenses, decreasing EBIT, or both as factors influencing the capacity to service interest expenses.

Overall, the data indicates the company experienced operational volatility with a pronounced impact around mid-2020, possibly linked to external macroeconomic factors. The recovery and subsequent steady performance in EBIT have been tempered by gradually increasing interest expenses, which have somewhat constrained the interest coverage ratio in the latest periods. The financial trends suggest improving operational earnings after a difficult phase but highlight the importance of monitoring debt servicing capacity given rising interest costs and fluctuating EBIT.