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Coffee Business Analysis

Your company, which specializes in hot and cold drinks, sit-in cafe style, is looking to open a satellite store in your local neighborhood (or close by). Management has asked you to survey the land and find out about the competition in your area.

Select a company in the cafe industry (coffee, tea, etc) within the last 5 years, and provide a link to the company's Web site.
Determine the following about that company:
-What are the company's top risks, and what is management doing about it?
-What size of operating or cash loss has management and the board agreed to be tolerable?
-Suggest at least three alternatives to managing the company's risk.

Solution Preview

Select a company in the cafe industry (coffee, tea, etc) within the last 5 years, and provide a link to the company's Web site.
I have taken Starbucks as an example. Starbucks Corporation (Starbucks) is the roaster and retailer of specialty coffee in the world, operating in more than 50 countries.
The link to the website is:
http://www.starbucks.com/

Determine the following about that company:
What are the company's top risks, and what is management doing about it?
It has the following risks:

1) Internal risk:
http://investing.money.msn.com/investments/company-report?symbol=US%3aSBUX

For analyzing internal risk factors I have done the ratio analysis. I will discuss important ratios such as fixed asset turnover ratio, debt ratio, debt to net worth ratio, current ratio, quick ratio, net profit ratio, inventory turnover ratio, return on equity ratios, etc.
Year 2010 Year 2009 Industry average

a)Current ratio 1.55 1.29
b)Quick ratio ...

$2.19