Starbucks Corporation (SBUX)
Solvency ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.46 | 0.46 | 0.47 | 0.43 | 0.50 |
| Debt-to-capital ratio | 2.08 | 2.44 | 2.97 | 1.64 | 2.14 |
| Debt-to-equity ratio | — | — | — | — | — |
| Financial leverage ratio | — | — | — | — | — |
The debt-to-assets ratio of Starbucks Corporation has remained relatively stable over the past five years, ranging between 0.43 and 0.50. This ratio indicates that, on average, around 46% to 50% of the company's assets are financed by debt.
On the other hand, the debt-to-capital ratio has shown more variability, with values ranging from 1.64 to 2.97 over the same period. This ratio suggests that debt accounts for approximately 164% to 297% of Starbucks' total capital, including both debt and equity.
The lack of data for the debt-to-equity ratio and financial leverage ratio hinders a complete assessment of the company's solvency from these perspectives. However, based on the available information, Starbucks has maintained a moderate level of leverage and has managed its debt within acceptable limits relative to its assets and capital. Investors and stakeholders may need to seek additional information to gain a more comprehensive understanding of the company's solvency position.
Coverage ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 9.84 | 10.82 | 9.76 | 12.40 | 3.67 |
Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). A higher interest coverage ratio is generally seen as favorable, as it suggests that the company is generating sufficient earnings to cover its interest expenses.
For Starbucks Corporation, the interest coverage ratio has been relatively stable over the past five years, ranging from 3.67 to 12.40. In the most recent year ending September 30, 2024, the interest coverage stood at 9.84, indicating that Starbucks earned almost 10 times the amount needed to cover its interest expenses.
The consistency of Starbucks' interest coverage ratios above 1 reflects a healthy financial position, with ample earnings to service its debt obligations. However, a slight decrease in the ratio from the previous year could indicate a slightly lower capacity to meet interest payments using operating income.
Overall, Starbucks Corporation's interest coverage ratio demonstrates a solid financial footing, providing investors and creditors with confidence in the company's ability to manage its debt obligations.