Question
The following data presents the financials of Starbucks and Dunkin' Brands for the fiscal year 2018. Use the given data to answer the required questions.
($ millions) | Starbucks | Dunkin' Brands |
Net revenue | $24,720 | $1,322 |
Cost of goods sold | $10,123 | $524 |
Operating expenses | $8,650 | $450 |
Operating income | $5,947 | $348 |
Interest and other (income) expense | $500 | $100 |
Earnings before provision for income taxes | $5,447 | $248 |
Provision for income taxes | $1,734 | $60 |
Net earnings | $3,713 | $188 |
Required: a. Calculate the gross profit margin, operating profit margin, and net profit margin for each company. b. Compute the return on assets (ROA) and return on equity (ROE) for both companies. Assume Starbucks' equity is $7,438 million and total assets are $21,460 million, while Dunkin' Brands' equity is $2,984 million and total assets are $5,732 million. c. Determine the debt-to-equity ratio for both companies. d. Compare the profitability of both companies based on your calculations. e. Analyze the operational efficiency of each company by calculating the asset turnover ratio.
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