Starbucks Corp. (NASDAQ:SBUX)

The financial data indicates several trends in the company's leverage and coverage ratios over the examined periods.

Debt to Capital

This ratio shows some fluctuation, starting at 1.96 in 2020, dropping to 1.57 in 2021, then increasing to 2.41 in 2022. It decreased again to 2.08 in 2023 and remained fairly stable around 1.92 to 2.01 in the following years. This pattern suggests periodic changes in the company's use of debt relative to its total capital.

Debt to Capital (Including Operating Lease Liability)

The ratio is consistently lower than the standard debt to capital ratio, beginning at 1.46 in 2020, decreasing to 1.29 in 2021, then rising to 1.58 in 2022 before stabilizing between 1.41 and 1.48 in subsequent years. This indicates that operating lease liabilities contribute significantly to the overall debt structure, but their relative impact remains somewhat stable over time.

Debt to Assets

This ratio remained relatively stable throughout the periods, fluctuating narrowly between 0.47 and 0.54. This steadiness indicates that the company's leverage relative to its asset base did not experience significant changes.

Debt to Assets (Including Operating Lease Liability)

Higher than the standard debt to assets ratio, this metric shows stability around the 0.82 to 0.84 range, suggesting that operating lease obligations materially increase the debt burden concerning assets but without notable variation year over year.

Interest Coverage

The interest coverage ratio showed a strong improvement from 3.66 in 2020 to a peak of 12.4 in 2021, reflecting enhanced ability to meet interest expenses. Despite a decline to 9.76 in 2022 and some subsequent fluctuation, the ratio remained relatively high until 2024. However, there was a significant reduction to 5.62 in 2025, which may point to reduced earnings relative to interest costs or increased interest expenses.

Fixed Charge Coverage

This ratio followed a similar pattern to interest coverage, increasing from 1.58 in 2020 to a peak of 3.61 in 2021. It experienced some decline afterward but maintained values above 3.0 until 2024. In 2025, it dropped to 1.95, signaling tighter coverage of fixed charges, which could suggest increased financial pressure or reduced operational earnings.

Overall, the company maintains relatively stable leverage when considering assets and capital, particularly after accounting for lease liabilities. Coverage ratios improved significantly from 2020 to 2021, indicating stronger earnings relative to financial obligations, but have declined notably in the most recent year, which may warrant closer monitoring of interest and fixed charge coverage going forward.

The analysis of the annual financial data reveals trends in total debt, shareholders' deficit, and related financial ratios over six consecutive years from 2020 to 2025.

Total Debt

Total debt shows a fluctuating but generally increasing trend over the period. Beginning at approximately $15.91 billion in 2020, it decreased to around $14.62 billion in 2021, then slightly increased to $14.87 billion in 2022. From 2023 onwards, total debt steadily rose each year, reaching approximately $16.07 billion by 2025. This suggests a gradual reliance on borrowing, especially increasing after 2022.

Shareholders' Deficit

The shareholders’ deficit, representing negative equity, exhibits significant variability. It decreased from about -$7.81 billion in 2020 to approximately -$5.32 billion in 2021, indicating a temporary improvement in equity position. However, the deficit sharply widened in 2022 to roughly -$8.71 billion. Subsequently, there is a partial recovery trend with the deficit narrowing to -$7.99 billion in 2023 and further to -$7.45 billion in 2024, before increasing again to -$8.10 billion in 2025. This instability indicates fluctuations in the company’s net asset position, reflecting varying retained earnings, losses, or other comprehensive income components.

Debt to Equity Ratio

The debt to equity ratio data is unavailable, limiting direct evaluation of leverage changes relative to equity. However, given the persistent shareholders' deficit (negative equity), calculating this ratio may present interpretative challenges or result in negative or undefined values, which might explain the absence of reported figures.

Overall, the financial position based on these metrics shows a trend towards increasing indebtedness coupled with continued negative equity. The volatility in shareholders' deficit suggests challenges in achieving sustained equity growth. The consistently high total debt level implies ongoing dependence on external financing, which could impact financial flexibility and risk profile.

The financial data over the reported periods indicates several notable trends and changes related to the company's leverage and equity position.

Total Debt (including operating lease liability)

The total debt shows fluctuations across the years. Initially, there was a decrease from 24,820,000 thousand USD in 2020 to 23,605,100 thousand USD in 2021. This slightly increased to 23,629,800 thousand USD in 2022, followed by a more pronounced upward trend reaching 26,611,500 thousand USD by 2025. The overall movement suggests a recent increase in total debt after a period of relative stability and a slight dip.

Shareholders’ Deficit

The shareholders' deficit, a negative measure of equity, exhibits volatile changes. It improved notably from -7,805,100 thousand USD in 2020 to -5,321,200 thousand USD in 2021, indicating a reduction in deficit. However, this trend reversed in 2022 with a sharp increase to -8,706,600 thousand USD. Thereafter, the deficit decreased somewhat but remained significant, closing at -8,096,600 thousand USD in 2025. This volatility and persistent deficit indicate ongoing challenges in equity recovery.

Debt to Equity Ratio (including operating lease liability)

The ratio data is not provided, however, given the negative shareholders’ equity (deficit) figures, standard debt to equity measures would either be undefined or indicate an unfavorable leverage position. The combination of increasing total debt alongside a fluctuating but generally large negative equity deficit suggests elevated financial risk and potential constraints in capital structure management.

In summary, the financial data portrays a company experiencing increased leverage with rising total debt levels after an initial decline, combined with a volatile and consistently negative shareholders’ equity position. These factors together may imply heightened financial risk, signaling the need for careful management of liabilities and equity to improve long-term financial stability.

The financial data reveals notable fluctuations in the company's debt structure and capital composition over the analyzed periods.

Total Debt

The total debt exhibits a generally increasing trend over the years, rising from approximately 15.9 billion US dollars in the earliest period to a peak nearing 16.1 billion US dollars in the latest year. Despite a slight decline observed between 2020 and 2021, the overall movement points to a gradual increase in debt obligations.

Total Capital

Total capital demonstrates significant variability across the same timeframe. It increased initially from roughly 8.1 billion US dollars to about 9.3 billion US dollars but then experienced a marked decrease to approximately 6.2 billion US dollars the following year. Subsequent years show a recovery trend with values approaching 7.9 billion US dollars by the last period, yet the capital figures remain volatile compared to the debt.

Debt to Capital Ratio

The debt to capital ratio fluctuates notably, reflecting the interplay between rising debt and variable capital. Starting from a high ratio of 1.96, it declined to 1.57, signaling an improvement in capital structure relative to debt. However, the ratio then increased significantly to 2.41, before descending and stabilizing near 2.0 in the most recent years. This indicates periods of increased leverage and risk, with debt levels surpassing capital by more than double at certain points.

Overall, the trends suggest that the company has relied on increasing debt levels while experiencing inconsistencies in capital resources. The higher debt to capital ratios in some years imply elevated financial leverage, which could indicate increased financial risk. The pattern of capital fluctuation may point to changes in equity or retained earnings impacting the capital base. Monitoring these metrics will be essential for assessing the company's financial stability and solvency risk moving forward.

Total Debt (including operating lease liability)

The total debt demonstrates an initial decrease from 24,820,000 thousand US dollars in 2020 to 23,605,100 thousand US dollars in 2021, followed by a stabilization around 23,629,800 thousand in 2022. Subsequently, it exhibits a consistent upward trend, reaching 26,611,500 thousand US dollars by 2025.

Total Capital (including operating lease liability)

Total capital shows variability over the examined period. It increased from 17,014,900 thousand US dollars in 2020 to 18,283,900 thousand in 2021, then experienced a noticeable decline to 14,923,200 thousand in 2022. Afterward, total capital recovers and grows steadily, reaching 18,514,900 thousand US dollars by 2025.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio reflects fluctuations without a consistent directional trend. It decreases from 1.46 in 2020 to 1.29 in 2021, increases sharply to 1.58 in 2022, and then moderately declines to 1.44 by 2025. This pattern indicates periods of both deleveraging and increased leverage, with a relatively high leverage level sustained throughout the period.

The financial data over the analyzed periods reveals several key trends related to the company's capital structure and asset base.

Total Debt

The total debt amount exhibits fluctuations throughout the periods. Initially, it decreased from 15.91 billion to 14.62 billion units, then experienced a slight increase and some volatility, eventually rising again to 16.07 billion units by the latest period. This suggests a variable borrowing pattern, with a moderate rise in leverage towards the end of the timeline.

Total Assets

Total assets show a less consistent trend. After an increase from approximately 29.37 billion to 31.39 billion units, there was a notable decrease to around 27.98 billion units in the following period. Subsequently, assets increased again, reaching approximately 32.02 billion units by the most recent date. This pattern indicates periods of asset divestiture or write-downs followed by recovery or acquisition activities.

Debt to Assets Ratio

The debt to assets ratio decreased from 0.54 to 0.47 during the earlier periods, implying a reduction in leverage relative to assets. However, it rose again to around 0.5 in later periods and then stabilized at 0.5. This ratio stabilization after some fluctuation suggests the company maintained a balanced approach to financing its assets with debt as it progressed, settling at a moderate leverage level.

Overall, the data reflects active management of debt levels alongside fluctuating asset values, with a leaning towards maintaining a consistent leverage ratio near 0.5 in recent periods. This balance might indicate a strategic intent to optimize capital structure while adapting to changes in the asset base.

The financial data over the reported periods reveal several key trends related to the company’s debt levels, asset base, and leverage position.

Total Debt (including operating lease liability)

The total debt shows a general increasing trend over the six-year period. Starting at approximately 24.82 billion US dollars in 2020, the debt decreased slightly in 2021 but resumed an upward trajectory thereafter. By 2025, it reached approximately 26.61 billion US dollars, indicating a modest growth in total debt obligations. This trend suggests ongoing borrowing or lease commitments, potentially to finance operations or expansion.

Total Assets

Total assets fluctuate throughout the period but display a generally upward trend from 29.37 billion US dollars in 2020 to about 32.02 billion US dollars in 2025. There is a notable dip in 2022 where assets decreased to approximately 27.98 billion US dollars but then recovered in subsequent years. This pattern may reflect asset disposition or depreciation in 2022 followed by acquisition or growth in asset base afterward.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio fluctuates between 0.75 and 0.84 during the period. It declined from 0.84 in 2020 to 0.75 in 2021, indicating a relative improvement in solvency or asset coverage of debts in that year. However, from 2022 onward, the ratio stabilized in the low 0.80s range, demonstrating a consistently high leverage position. The persistence of a high debt to assets ratio near or above 0.80 suggests the company maintains significant leverage, which could imply elevated financial risk but also the use of debt as a strategic tool for funding.

Overall, the company exhibits steady growth in both debt and assets, with leverage ratios indicating a consistently leveraged financial structure. The fluctuations in asset value and leverage ratio around 2021 and 2022 warrant further investigation to understand the underlying operational or market factors influencing these changes.

The analysis of the financial data reveals several notable trends over the six-year period. The total assets experienced fluctuations, initially increasing from approximately $29.4 billion in 2020 to about $31.4 billion in 2021. This was followed by a reduction to $27.9 billion in 2022, and then a recovery trend with assets rising to $32.0 billion by 2025. This pattern suggests a period of contraction in asset base around 2022, succeeded by a recovery and growth phase.

In contrast, shareholders' deficit exhibited volatility with significant swings. Starting at a deficit of $7.8 billion in 2020, the deficit improved to approximately $5.3 billion in 2021, indicating a strengthening equity position. However, this improvement reversed sharply in 2022 to a deficit level close to $8.7 billion. Subsequent years show some recovery, with deficits moderating to between $7.4 billion and $8.1 billion by 2025, but remaining at comparatively high deficit levels.

The absence of data for the financial leverage ratio limits the ability to directly assess the leverage trend and its impact on capital structure. Nevertheless, the sizable negative shareholders’ equity suggests significant liabilities exceeding assets, which may have implications for the company’s financial stability.

Total Assets

Displayed an overall growth trend with a mid-period dip, indicating dynamic asset management or external factors impacting asset holdings.

Shareholders’ Deficit

Experienced considerable volatility, with temporary improvement followed by a return to higher deficit levels, highlighting challenges in maintaining a positive equity position.

Earnings before interest and tax (EBIT)

EBIT shows a generally increasing trend from 2020 to 2023, rising markedly from 1,601,400 thousand US$ in 2020 to a peak of 5,952,000 thousand US$ in 2023. However, it declines substantially thereafter, falling to 3,049,900 thousand US$ by 2025. This indicates strong operational performance improvements initially, followed by a notable reduction in earnings in the last two years observed.

Interest Expense

Interest expense increases steadily over the six-year period, moving from 437,000 thousand US$ in 2020 to 542,600 thousand US$ in 2025. The rise is gradual but consistent, suggesting increased borrowing costs or higher levels of debt during this period.

Interest Coverage Ratio

The interest coverage ratio demonstrates significant volatility. It increases sharply from 3.66 in 2020 to a peak of 12.4 in 2021, reflecting a strong ability to cover interest expenses from EBIT. It then declines gradually but remains above 5.5 until 2025, where it drops to 5.62. Despite the decrease, the ratio indicates that EBIT remains sufficient to cover interest expense, though the margin of safety narrows notably by 2025 due to both lower EBIT and sustained interest expenses.

Overall Insights

The data reveals initial substantial growth in earnings before interest and tax, indicating improved operational efficiency or revenue growth, particularly up to 2023. However, the decline in EBIT in the final years suggests challenges in maintaining that level of profitability. Meanwhile, steady increases in interest expense imply rising financial costs. The interest coverage ratio's pattern reflects these dynamics, with a robust capacity to meet interest obligations early on, weakening towards the end of the period. This could signal increased financial risk if the trend continues unless operational performance improves or debt costs are managed effectively.

The financial data reveals significant fluctuations in earnings before fixed charges and tax over the observed periods. The earnings increased notably from 3,175,000 thousand US dollars in 2020 to a peak of 7,405,900 thousand US dollars in 2021, followed by a decline to 6,269,600 thousand US dollars in 2022. Subsequent years saw further variability with earnings reaching 7,553,000 thousand US dollars in 2023 before decreasing again in 2024 and 2025, where the latter year showed the lowest earnings in the recent three years.

Fixed charges demonstrate a steady upward trend across the periods. Starting from 2,010,600 thousand US dollars in 2020, these charges increased incrementally each year up to 2,639,600 thousand US dollars in 2025, reflecting rising fixed financial commitments.

The fixed charge coverage ratio, an indicator of the company's ability to meet fixed charges from earnings before fixed charges and tax, exhibits noteworthy variation. The ratio improved substantially from 1.58 in 2020 to a high of 3.61 in 2021, indicating a strengthened capacity to cover fixed charges in that year. Thereafter, it declined to 3.08 in 2022, slightly recovered to 3.51 in 2023, and diminished progressively to 3.17 in 2024 and further to 1.95 in 2025. The decrease in this ratio towards the most recent year suggests a reduced buffer for fixed charges coverage, despite the increasing fixed charges, due to the comparatively lower earnings.

Key observations:

The company experienced strong earnings growth initially, culminating in 2021, after which earnings exhibited volatility with a general downward pressure towards 2025.

Fixed charges consistently increased over the entire period, indicating rising financial obligations.

The fixed charge coverage ratio peaked in 2021 but decreased thereafter, with a significant reduction by 2025, implying increased risk in meeting fixed charges from operating earnings.

The combination of rising fixed charges and declining coverage ratio suggests growing financial strain that warrants attention in future financial planning.