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Accounting ISU - Tim Horton's vs. Starbucks, Financial Analysis

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by

Arup Roy

on 12 June 2011

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Transcript of Accounting ISU - Tim Horton's vs. Starbucks, Financial Analysis

Tim Hortons vs. Starbucks
Financial Analysis ISU by: Arup R. & Vishal B. Well, what do these companies do? Chain stores, franchise, and other merchandise
fast food restaurant industry, coffeehouse industry

Franchise
selling license to property owners to start their own Tim Hortons store
continuous income from franchise
Chain Stores
sells a variety of goods-- from baked goods to specialty drinks
Tim Hortons is the dominant country in Canada

they both sell other merchandise like coffee makers and whole bean coffee Statistics! From 2007 to 2010 Tim Hortons accounts for 22.6% of all fast food industry revenues in Canada in 2005
Tim Hortons accounts for 76% of the Canadian coffee market
Starbucks only accounts for 7% of the Canadian coffee market Quoted from Wikipedia There were a total of 3750 Tim Hortons restaurants operating in Canada and USA in 2010
3148 in Canada, 602 in USA

There were a total of 16 858 Starbucks restaurants operating worldwide in 2010
11 131 in USA, and 5727 international restaurants From 2010 Annual reports of Starbucks and Tim Hortons Important Figures References Information
http://en.wikipedia.org/wiki/Starbucks
http://en.wikipedia.org/wiki/Tim_Hortons
http://www.timhortons.com/ca/pdf/Tim_Hortons_Inc_2010_Annual_Report_on_Form_10-K(1).pdf
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NzkzODl8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1
http://media.corporate-ir.net/media_files/irol/99/99518/SBUX_AR.pdf
http://www.dailyfinance.com/financials/starbucks-corporation/sbux/nas/income-statement
http://www.dailyfinance.com/quotes/tim-hortons-inc/thi/nys Pictures
http://ambalaj.files.wordpress.com/2009/09/starbucks-cup.jpg?w=480&h=422
http://asia.cnet.com/i/r/2005/gb/jul/starbucks_b1.jpg
http://www.beverageanswers.com/coffee/coffeenewsblog/wp-content/uploads/image/tassimo-TA1400.jpg
http://students.wrdsb.ca/mahas1773/files/2011/05/frappuccino1.jpg

http://www.everycup.ca/thumbnails/default_story/en/TIM011_story326x240_coffeeCup_en.jpg
http://www.everycup.ca/thumbnails/default_story/en/TIM011_story326x240_timbits_en.jpg
http://ecx.images-amazon.com/images/I/41dwf8PjecL._SX230_.jpg
http://www.timhortons.com/ca/images/general/thumb_icedcapp_mintchocolate.jpg Video: Jimmy [Kimmel's] Starbucks Standoff
http://www.you tube.com/watch?v=ISIxuqlWrSo&hd=1 Trends Working Capital
indicates amount of cash left over after immediate debts are paid
creditors prefer a high value
investors prefer a positive and low value Current Ratio
indicates the dollar worth of current assest for each one dollar of current liabilities
current ratio of 2:1 is optimal
high ratio indicates misuse of assets Quick Ratio
compares the most liquid assets to the current liabilities
gives an accurate picture whether company is able to pay off debts
current ratio of 1:1 is optimal
high ratio indicates misuse of assets Merchandise Turnover
indicates the number of times the inventory was sold over
higher ratio is optimal but also depends on inventory Accounts Receivable Collection Period
indicates how long company should wait to collect accounts receivable accounts
lower period allows companies to get cash quicker and put it back in the business Equity Ratio
indicates the dollar value of owner's equity for each one dollar of assets Debt Ratio
The dollar amount of liabilities for every one dollar of assets
high ratio means there is more creditor money in the business rather than owner's money Rate of Return on Net Sales
indicates the percent of revenue that becomes net income
higher percentage is optimal Rate of Return on Average Owner's Equity
comparison of net income to owner's equity
indicates the percent amount of how much net income there is compared to the whole 100% amount of owner's equity Creditor's Pick: Starbucks Investor's Pick:Tim Hortons Creditor's and Investor's Pick: Tim Hortons Creditor's and Investor's Pick: Starbucks Creditor's and Investor's Pick: Tim Hortons Creditor's and Investor's Pick: Starbucks Creditor's Pick: Starbucks Investor's Pick: Tim Hortons Creditor's and Investor's Pick: Tim Hortons Investor's Pick: Tim Hortons Summary Overall Creditor's Pick: Tim Hortons
Overall Investor's Pick: Tim Hortons According to Arup Roy and Vishal Bollu Tim Hortons Starbucks
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