In fiscal year 2011, Starbucks Corporation (SBUX) had revenue of $11.70 billion
In fiscal year 2011, Starbucks Corporation (SBUX) had revenue of $11.70 billion, gross profit of $6.75 billion, and net income of $1.25 billion. Peet’s Coffee and Tea (PEET) had revenue of $372 million, gross profit of $72.7 million, and net income of $17.8 million.a. Compare the gross margins for Starbucks and Peet’s.b. Compare the net profit margins for Starbucks and Peet’s.c. Which firm was more profitable in 2011?static/image/hrline/1.gif
Answer a.Starbucks Corporation (SBUX):Gross Profit Margin = Gross Profit/ Revenue * 100Gross Profit Margin = $6750 Million/ $11,700 Million * 100Gross Profit Margin = 57.69%Peet's Coffee and Tea (PEET):Gross Profit Margin = Gross Profit/ Revenue * 100Gross Profit Margin = $ 72.7 Million/ $ 372 Million * 100Gross Profit Margin = 19.54%The Gross Profit Margin of Starbucks Corporation (SBUX) is higher than that of Peet's Coffee and Tea (PEET)Answer b)Net Profit Margin = Net Profit/ Net Sales * 100Starbucks Corporation (SBUX):Net Profit Margin = $1,250 Million/ $11,700 Million * 100Net Profit Margin = 10.68%Peet's Coffee and Tea (PEET):Net Profit Margin = $17.8 Million/ 372 MillionNet Profit Margin = 4.78%The Net Profit Margin of Starbucks Corporation (SBUX) is higher than that of Peet's Coffee and Tea (PEET)Answer c) It can be seen that both the Gross Profit Margin and the Net Profit Margin of Starbucks Corporation (SBUX) are higher than that ofPeet's Coffee and Tea (PEET). Hence, Starbucks Corporation (SBUX) is more profitable.
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