Starbucks Corp. (NASDAQ:SBUX)

The financial leverage indicators exhibit a mixed pattern over the reported periods, with some ratios missing data. The available ratios provide insight into the company's leverage and ability to cover financial obligations.

Debt to Capital

This ratio shows fluctuations, starting at 2.26 in 2019, declining to a low of 1.57 in 2021, then rising again to 2.41 in 2022 before gradually decreasing to 1.92 in 2024. This pattern suggests variability in the company's capital structure, with a peak in leverage in 2022 followed by a modest deleveraging trend.

Debt to Capital (Including Operating Lease Liability)

The trend is generally downward, beginning at 2.26 in 2019 and decreasing steadily to 1.41 by 2024. This indicates that when operating lease liabilities are included, the company's relative debt burden has decreased more consistently over time compared to the standard debt to capital ratio.

Debt to Assets

This ratio shows a slight decline from 0.58 in 2019 to 0.47 in 2021, indicating reduced reliance on debt relative to total assets, followed by a moderate increase to 0.53 in 2022 and a gradual decline back to 0.50 by 2024. The figures suggest some variability but overall a stable level of debt financing relative to assets.

Debt to Assets (Including Operating Lease Liability)

Contrasting with the standard debt to assets ratio, this measure rises sharply to 0.84 in 2020, then fluctuates between 0.75 and 0.84 in subsequent years, ending at 0.82 in 2024. This indicates a significant and sustained impact of operating lease liabilities on the company’s leverage position relative to total assets.

Interest Coverage

The ability to cover interest expenses fluctuates significantly. It dropped sharply from 14.49 in 2019 to 3.66 in 2020, which could reflect increased interest expense or decreased earnings. It rebounded to 12.4 in 2021, then declined gradually to 9.84 by 2024. While this indicates a recovery after 2020, the coverage ratio remains below the initial peak, suggesting moderate risk in meeting interest obligations.

Fixed Charge Coverage

This ratio shows a similar trend to interest coverage, starting at 3.52 in 2019, falling to 1.58 in 2020, recovering to 3.61 in 2021, then fluctuating around 3.1 to 3.5 in subsequent years, ending at 3.17 in 2024. The recovery denotes improved ability to meet fixed financial charges post-2020, although the ratio does not reach the original 2019 level.

In summary, the data reflects a company experiencing variability in leverage and coverage metrics over the six-year period. Operating lease liabilities notably influence leverage measurements. The significant dips in coverage ratios in 2020 suggest a period of financial strain or increased costs, followed by a partial recovery, yet neither coverage measure returns to its initial strength by 2024. The overall pattern indicates a cautious deleveraging trend alongside a moderately stable capacity to cover financial obligations.

The financial data presents key balance sheet metrics over a six-year period, illustrating significant trends in the company's leverage and equity position.

Total Debt

The total debt shows an overall increasing trend from US$11,167 million in 2019 to approximately US$15,568 million in 2024. There was a sharp increase from 2019 to 2020, jumping from around US$11.2 billion to nearly US$15.9 billion, followed by a slight decline in 2021 to about US$14.6 billion. From 2021 onwards, total debt steadily climbed again, reaching its peak in 2024. This progression suggests a growing reliance on debt financing.

Shareholders' Deficit

Shareholders' deficit remains negative throughout the period, indicating a negative equity position. It worsened from -US$6.2 billion in 2019 to nearly -US$7.8 billion in 2020, suggesting either losses or other equity-reducing factors during that time. In 2021, the deficit improved to approximately -US$5.3 billion but deteriorated again sharply in 2022 to -US$8.7 billion, the worst position in the observed years. Although the deficit somewhat improved in 2023 and 2024 to around -US$7.9 billion and -US$7.4 billion respectively, it remains significantly negative, reflecting persistent challenges in equity retention.

Debt to Equity Ratio

The data for the debt to equity ratio is not explicitly provided. However, given the combination of rising total debt and consistently negative shareholders' equity, this ratio is presumed to be exceedingly high or undefined, as negative equity values distort traditional leverage measurements. This scenario reflects a financially leveraged position with significant obligations compared to the residual shareholders' stake.

In summary, the company exhibits a trend of increasing debt alongside persistent negative equity, which may signal elevated financial risk. The fluctuations in shareholders’ deficit and the substantial rise in total debt suggest careful monitoring is necessary to assess long-term solvency and capital structure stability.

The financial data over the analyzed multi-year period reveals several noteworthy trends related to debt levels, shareholders' deficit, and capital structure.

Total Debt (including operating lease liability)

The total debt increased substantially from approximately $11.2 billion in 2019 to about $25.8 billion in 2024. Although there was a significant jump from 2019 to 2020, the debt level remained relatively stable between 2020 and 2022, fluctuating around $23.6 billion. Subsequently, the debt resumed its upward trend, reaching its highest point in 2024. This pattern indicates growing reliance on debt financing over the period, with particularly sharp increases in the earlier and later years.

Shareholders’ Deficit

The shareholders’ deficit remained negative throughout the period, indicating a situation where liabilities exceeded assets in terms of equity valuation. The deficit deepened from approximately -$6.2 billion in 2019 to around -$7.8 billion in 2020, showing a deterioration in net worth. It improved somewhat in 2021 to about -$5.3 billion but then worsened again over the next two years, reaching approximately -$8.7 billion in 2022. The deficit slightly improved in 2023 and 2024 but remained significantly negative. This oscillation suggests volatility in the company’s equity position but overall continued negative shareholders’ equity, which may reflect accumulated losses or other comprehensive factors affecting net assets.

Debt to Equity Ratio (including operating lease liability)

Values for the debt to equity ratio were not provided. However, considering the trend of increasing total debt combined with a continuing negative shareholders’ equity, it can be inferred that this ratio would be unusually high or possibly not meaningful due to negative equity values. This implies a leveraged capital structure, which can increase financial risk.

Overall, the financial data indicates a company that has been increasing its debt load considerably, while equity remains in deficit throughout the entire timeframe. This combination may suggest challenges in retaining positive net worth despite the company’s ability to obtain financing. The stability in debt during the mid-period followed by renewed increases indicates potential shifts in financing strategy or operational needs. The persistent shareholders’ deficit underscores ongoing pressures on equity, possibly from accumulated losses or expansions financed through debt.

The financial data over the six-year period reveals notable shifts in debt and capital structure. Total debt displayed an overall upward trajectory, increasing from 11.17 billion US dollars in 2019 to 15.57 billion US dollars in 2024. However, this progression was not uniform; the debt peaked in 2020 at 15.91 billion, declined somewhat in the subsequent years, and then rose steadily again towards the end of the period.

Total capital exhibited a different pattern. From 2019 to 2021, there was a marked increase in capital, rising from 4.93 billion to 9.29 billion US dollars, indicating a phase of capital expansion. However, capital dropped significantly in 2022 to 6.16 billion before gradually recovering to 8.12 billion by 2024.

The debt to capital ratio, which measures the proportion of debt in relation to total capital, reflects these fluctuations. This ratio was highest in 2019 at 2.26, then showed a declining trend reaching its lowest point of 1.57 in 2021. Following this, the ratio increased sharply again in 2022 to 2.41, the highest value in the observed timeframe, before declining steadily to 1.92 in 2024.

Total Debt

Steadily increased overall with a peak in 2020, then fluctuated before rising again in the final years.

Total Capital

Experienced significant growth up to 2021, followed by a sharp decline in 2022, and partial recovery afterward.

Debt to Capital Ratio

Varied substantially, indicating changes in financial leverage with notable decreases until 2021, a spike in 2022, and a moderate decline through 2024.

These trends suggest periods of capital restructuring and changing leverage strategies, with an emphasis on managing debt levels relative to capital. The spike in the debt to capital ratio in 2022, concurrent with a capital drop, may warrant further examination to understand the underlying causes and potential impacts on financial stability. The overall data indicates a cautious approach to balancing debt and capital over the period under review.

Total Debt (including operating lease liability)

The total debt has exhibited a general upward trend over the six-year period. Starting at approximately 11.17 billion USD in late 2019, the debt recorded a significant increase by 2020, reaching nearly 24.82 billion USD. Although there was a slight decrease in 2021 to about 23.61 billion USD, the total debt resumed increasing from 2022 onward, culminating at roughly 25.8 billion USD in 2024. This pattern indicates marked growth in debt levels, especially notable between 2019 and 2020, followed by relatively stable but increasing debt in the subsequent years.

Total Capital (including operating lease liability)

Total capital showed considerable variability over the measured periods. Beginning at around 4.93 billion USD in 2019, there was a substantial rise to approximately 17.01 billion USD in 2020, and a further increase to about 18.28 billion USD in 2021. However, this was followed by a decrease to 14.92 billion USD in 2022. In 2023 and 2024, the total capital moved upward again to levels near 16.57 billion and 18.35 billion USD respectively. The fluctuations suggest periods of both capital expansion and contraction, with an overall growth trend when comparing the start and end of the period.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio declined significantly from 2.26 in 2019 to 1.46 in 2020, indicating a relative reduction in debt compared to total capital or an improved capital structure at that time. This ratio further decreased to 1.29 in 2021, reaching its lowest point within the period analyzed. However, it then increased to 1.58 in 2022, suggesting a deterioration in leverage or capital structure. In the last two years of data, the ratio decreased slightly again, arriving at 1.41 in 2024. Overall, the ratio reflected an initial improvement in leverage from 2019 through 2021, followed by a slight increase, and a leveling off at a moderately improved ratio compared to the start.

Total Debt

The total debt increased markedly from US$11,167,000 thousand in 2019 to a peak of US$15,909,500 thousand in 2020. Following this peak, the debt level showed some fluctuation, decreasing to US$14,615,800 thousand in 2021, then rising again gradually through 2024 to US$15,568,400 thousand. Overall, the trend indicates an increase in debt over the six-year period with some periods of reduction but a general inclination towards higher leverage.

Total Assets

Total assets exhibited substantial growth from US$19,219,600 thousand in 2019, reaching a high point of US$31,392,600 thousand in 2021. After this peak, assets decreased to US$27,978,400 thousand in 2022 but recovered in the following years, ending at US$31,339,300 thousand in 2024. This pattern suggests expansion in asset base, albeit with volatility around 2022, possibly reflecting strategic asset reallocation or market conditions.

Debt to Assets Ratio

The debt to assets ratio demonstrated a declining trend from 0.58 in 2019 to 0.47 in 2021, signifying an improvement in the capital structure and possibly better solvency during this period. However, from 2021 onwards, the ratio increased to 0.53 in 2022 before moderately declining to 0.50 by 2024. Despite fluctuations, the ratio remains below the initial 2019 level, indicating a somewhat more conservative use of debt relative to assets in the recent years.

The analysis of the financial data over the six-year period reveals significant trends regarding the company's leverage and asset base.

Total Debt (Including Operating Lease Liability)

The total debt exhibited a marked increase from $11,167,000,000 in 2019 to $24,820,000,000 in 2020, more than doubling within a single year. Subsequent years saw fluctuations around this elevated level, with a slight decline to $23,605,100,000 in 2021, then a gradual rise again to $25,803,100,000 in 2024. Overall, the debt level has remained substantially higher since 2020 compared to 2019.

Total Assets

Total assets increased notably from $19,219,600,000 in 2019 to $29,374,500,000 in 2020, mirroring the increase in debt. They continued to rise to a peak of about $31,392,600,000 by 2021, but then declined to roughly $27,978,400,000 in 2022. In the following years, assets increased again reaching approximately $31,339,300,000 in 2024, approximating the highest levels observed over the period.

Debt to Assets Ratio (Including Operating Lease Liability)

This ratio showed a significant upward trend from 0.58 in 2019 to a peak of 0.84 in 2020, indicating a substantial increase in leverage relative to assets. Although the ratio decreased to 0.75 in 2021, it returned to approximately 0.83-0.84 in the subsequent years and remained relatively stable through 2024, suggesting sustained higher leverage levels.

In summary, the company experienced a significant rise in both debt and assets starting in 2020. However, the increase in debt outpaced asset growth initially, resulting in higher leverage. Following some stabilization, leverage ratios have remained elevated through 2024, reflecting continued reliance on debt financing relative to asset size.

The analysis of the financial data over the six-year period reveals several key trends in the company's financial position and leverage.

Total assets

Total assets demonstrate an overall increasing trend from 19,219,600 thousand US dollars in the fiscal year ending September 2019 to 31,339,300 thousand US dollars by September 2024. There is a notable increase between 2019 and 2020, where assets rose significantly to 29,374,500 thousand US dollars, continuing to rise more moderately in the subsequent years. Though there was a slight dip in 2022 to 27,978,400 thousand US dollars, the total assets recovered and increased again through 2023 and 2024.

Shareholders’ deficit

The shareholders’ deficit shows considerable volatility throughout the period. Beginning at a negative 6,232,200 thousand US dollars in 2019, the deficit deepened substantially in 2020 to -7,805,100 thousand US dollars. In 2021, there is a notable improvement with the deficit reducing to -5,321,200 thousand US dollars. However, this improvement did not sustain, as the deficit worsened again in 2022 to -8,706,600 thousand US dollars. After 2022, the shareholders’ deficit ameliorated somewhat but remained significantly negative at -7,994,800 thousand in 2023 and -7,448,900 thousand in 2024. The data suggest fluctuating equity challenges during these years.

Financial leverage ratio

The financial leverage ratio data is missing across all periods, preventing a direct assessment of leverage trends via this metric. Without these values, an explicit calculation or observation of leverage trend behavior over time cannot be made from the given information.

In summary, while total assets have exhibited growth over the time frame reviewed, shareholders' deficit remains substantially negative with some fluctuations, indicating ongoing equity challenges. The absence of financial leverage data limits the ability to analyze the company's capital structure adjustments and risk exposure through leverage metrics.

Earnings before Interest and Tax (EBIT)

The EBIT experienced significant fluctuation over the analyzed periods. It initially peaked at approximately 4.8 billion in 2019, then dropped sharply to around 1.6 billion in 2020, indicating a severe impact on operating profitability. Following this decline, EBIT recovered strongly in 2021 to nearly 5.8 billion, increased slightly in 2023, before slightly decreasing again in 2024 to approximately 5.5 billion. The overall trend suggests a recovery from a notable dip in 2020, with EBIT stabilizing at a high level in the recent years.

Interest Expense

Interest expense shows a steady upward trend across the periods. Starting at approximately 331 million in 2019, it increased consistently each year, reaching 562 million by 2024. This indicates a continual rise in borrowing costs or debt levels over the period under review.

Interest Coverage Ratio

The interest coverage ratio declined significantly from a high of 14.49 in 2019 to a low of 3.66 in 2020, reflecting reduced ability to cover interest expenses from operating earnings during that period. Subsequently, the ratio improved markedly in 2021 to 12.4 and has since stabilized between 9.8 and 10.8 in the following years. This pattern aligns with the fluctuations seen in EBIT and the increasing interest expense, demonstrating an improved but slightly pressured capacity to service interest obligations in recent years compared to the 2019 benchmark.

The financial data reveals notable fluctuations in the earnings before fixed charges and tax over the reported periods. Initially, earnings stood at 6,238,900 thousand US dollars in 2019, followed by a significant decline to 3,175,000 thousand in 2020. Subsequently, earnings convalesced, rising to 7,405,900 thousand in 2021, then declining somewhat to 6,269,600 thousand in 2022, before increasing again to a peak of 7,553,000 thousand in 2023. The latest figure for 2024 shows a slight decrease to 7,255,100 thousand.

Fixed charges have demonstrated a generally upward trend throughout the periods. Beginning at 1,772,700 thousand US dollars in 2019, fixed charges rose each year with minor fluctuations: 2,010,600 thousand in 2020, 2,049,000 thousand in 2021, 2,037,700 thousand in 2022, 2,151,100 thousand in 2023, culminating at 2,285,500 thousand in 2024. This steady increase suggests rising financial obligations or costs classified under fixed charges.

The fixed charge coverage ratio, which measures the adequacy of earnings to cover fixed charges, varied considerably. It fell sharply from 3.52 in 2019 to 1.58 in 2020, reflecting the large earnings drop amid increasing fixed charges. The ratio improved significantly to 3.61 in 2021, correlating with the recovery in earnings. Subsequently, it decreased to 3.08 in 2022, rose again to 3.51 in 2023, and declined to 3.17 in 2024. Despite the fluctuations, the ratio mostly remained above 3 after the recovery in 2021, indicating generally sufficient coverage of fixed charges by earnings in recent years.

Overall, the data depicts a period of volatility in earnings, notably impacted in 2020 by a sharp downturn, followed by recovery and growth. Fixed charges steadily increased, yet earnings generally remained sufficient to cover these charges, as evidenced by the fluctuating but mostly adequate fixed charge coverage ratio in the post-2020 periods.