Stock Journal: Starbucks Company

STOCK JOURNAL- SBUX Company
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Course
Instructor
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 “in millions”

30-Sep-19

30-Sep-18

1-Oct-17

Assets

$19,219.60

$24,156.40

$14,365.60

Liabilities

$25,450.60

$22,980.60

$8,908.60

Equity

($6,231.00)

1,175.80

5,457.00

Starbucks Corporation (SBUX) most recent annual report is for the fiscal year ended September 30, 2018, but there is a proxy statement for the year ended September 30, 2019. In the 2107 financial year, the assets were $14,365.60 M and increased to $24,156.40 million in 2018 then fell to $19,219.60 million in 2019. On the other hand, liabilities have increased substantially over the past three years from $8,908.6 million in 2017 to $25,450.60 million in 2019. The increase in liabilities was mostly linked to long-term liabilities and specifically long-term debt as well as the deferred revenue. The company’s liabilities have been rising and since the liabilities were more than the liabilities in 2019, the company reported equity of -$6,231 million compared to $ 1,175.80 million in 2018 (Starbucks, 2018). Increase in liabilities and fall in assets explains the negative equity in FY 2019 and the equity ratio has decreased gradually.
The changes in the asset and liabilities is negative from the investor’s / stockholder's view since there obligations in the form of liabilities are increasing at a faster rate than the assets. This was mainly due to the increase in the long-term liabilities, while the current assets increased faster than the current liabilities in the 2018 financial year, and the operating capital also increased because of the increase in non-current assets. However, since there was a big increase in the long-term liabilities in 2018, the equity reduced from 2017 and in the 2019 proxy b...