There are a few things that I would suggest. The first thing would be cutting back on interest payments (Wang, 2021). In 2022, Starbucks paid $474.7 million in interest payments (Starbucks, n.d.). If they could pay off some of their debt and/or invest on fresh growth perspectives using the money that they would save by lowering the interest payments (Wang, 2021). This can be done by refinancing into lower interest loans.

Another recommendation would be towards reducing the income taxes (Wang, 2021). In 2022, their income taxes were $1,157.6 million (Starbucks, n.d.). They could potentially invest in new prospects and pay off more debt if their taxes were to be reduced (Wang, 2021). This could be done by relocating some of their operations to a region with a lower corporate tax rate.

Both of these suggestions offer an immediate effect in cash flow because they are raising their operating cash flow while also cutting costs (Wang, 2021). Doing this would allow Starbucks to be able to save more money for future expansion endeavors. It also can go towards repaying debt and shareholder returns (Wang, 2021).

After reading the above, if this company did wish to reduce interest payments would they need to re-negotiate existing loans?