. Verizon 8:00 AM 85% Done Attachment 1 of 3 Starbucks Corporation Balance Sheets for 2015 and 2014 SOOD ODOS $ 7190 Predeces Deferred income and ment, net Long-term Property One Totale Good and wants Totalt Current Accounts payable Accrued expenses Other curren ties Totalcuments Long O long tama Common ock Och Sh 6 00.000 Starbucks Corporation Reported Income Statements for 2015 and 2014 ($ in 000.000's Done Attachment 2 of 3 Starbucks Corporation Reported Income Statements for 2015 and 2014 ($ in 000.000 2015 2014 Total net revenues $16.4478 Cost of sales $7775 $5.858.8 Gross profit $11.3752 Store operating expenses Other operating expenses Depreciation expense General and administrative expenses Total operating expenses $ 5.4111 $ 5224 $ 9939 $ 1.1967 $80241 $ 4,6382 $ 4573 7096 $ 6,7762 Operating income $ 3.351.1 $ 2.8128 Income from equity investees Interest income and other income Interest expense $ $ 249.9 3725 5205 $ $ 268.3 142.7 354) (EBT) 1597 Earnings before income Income tax expense $ 39030 $ 1.143.7 $ $ 1.092.0 Nutcome $ 2.7593 $ 20677 Earnings per share Share outstanding In 000 1.5063 Cash dividend declared perhe $0.30 50 54 Operating margin O Total metrovenes Income tax E ncome .Verizon 8:00 AM 17 85% Done Attachment 3 of 3 Earnings at Mys 2016 Rev Grow High Low Cases 2016 Profil Marina dividend pay the same as it was in 2015 A 2015 Yew End Sub traded 5684 The beta for Starbucks is 0.76 amerika s 2% and market risk premium of What is the stock price based on the information given above 1) Using comparable PE and Pickle the Starbucks stock price? 2) Using two-stage dividend growth model in the Starbucks stock price What is your growth rate for the first period? What is your growth rate for the second forever) 2014 Starbucks Corporation Balance Sheets for 2015 and 2014 ($ in 000,000's) 2015 Current assets Cash and cash equivalents $ 1.530.1 Short-term investments $ 813 Accounts receivable $ 719,0 Inventory $ 1,306.4 Prepaid expenses $ 3342 Deferred income taxes $ 381.7 Total current assets $ 4,352.7 $ 1,708.4 $ 135.4 $ 631.0 $ 1.090.9 $ 2856 $ 3174 $ 4.168.7 Fixed assets Long-term investments Property, plant and equipment, net Other assets Total foxed assets $ 664.5 $ 4,088.3 $ 1.244.8 $ 5,997.6 $ 833.3 $ 3,519,0 $ 1,1022 $ 5.454.5 Goodwill and intangible assets Total assets $ 2.095.8 $12.446.1 $ 1,129.7 $10.7529 Current liabilities Accounts payable Accrued expenses Other current liabilities Total current liabilities $ 6842 $ 1.760.7 $ 1.208.6 $ 3.653.5 $ 533.7 $ 1,514.4 $ 990.6 $ 3.038.7 Long-term debt Other long-term liabilities Total liabilities $ 2.347.5 $ 6253 $ 6,6263 $ 2,048.3 $ 3922 $ 5.479 2 $ 15 $ 41.1 Shareholder equity Common stock Paid-in capital Retained earnings Other stockholder equity Total stockholder equity Total liabilities and equity $ 5,974.8 $197.6) $ 5,819.8 $12.446.1 $ 07 $ 39.4 $ 5.206.6 $ 27.0 $ 5.273.7 $10.7529 Shares outstanding (000.000's) (Fiscal) Year-end stock price 1.495.9 $56.84 1.5063 $37.73 Starbucks Corporation Reported Income Statements for 2015 and 2014 ($ in 000,000's) 2015 2014 Total net revenues $19,162.7 $16,447.8 Cost of sales $ 7.787.5 $ 6,858.8 Gross profit $11.375.2 $ 9,589.0 Store operating expenses Other operating expenses Depreciation expense General and administrative expenses Total operating expenses $ 5,411.1 $ 522.4 $ 893.9 $ 1,196.7 $ 8,024.1 $ 4,638.2 $ 457.3 $ 709.6 $ 971.1 $ 6,776.2 Operating income $ 3,351.1 $ 2,812.8 Income from equity investees Interest income and other income Interest expense $ $ 249.9 372.5 ($70.5) $ $ 268.3 142.7 ($64.1) Earnings before income taxes (EBT) Income tax expense $ 3,903.0 $ 1,143.7 $ 3,159.7 $ 1,092.0 Net income $ 2,759.3 $ 2,067.7 Earnings per share Shares outstanding (in 000's) $1.84 1,495.9 $1.37 1,506.3 Cash dividend declared per share $0.80 $0.64 17.1% Operating margin (Ol/Total net revenues) Income tax rate (EBT/Income tax expense) 17.5% 29.3% 34.6% Earnings Est Current Dec 15 Next Year Sep 17 Current Year Sep 16 1.89 26.00 NA NA NA Avg Estimate No. of Analysts Low Estimate High Estimate Year Ago EPS NA NA 1.90 NA 189 033 1.58 Revenue Est Next Me Current Dec 15 5.398 Current Year Sep 16 21.638 Next Year Sep 17 23.498 5.048 25 Avg. Estimate No. of Analysts Low Estimate High Estimate Year Ago Sales Sales Growth (yearlest) 5.228 5.556 4.80B 4.95 5.138 4 56B 10.50% 21 328 22 000 19.16B 21.308 24 218 21.638 8.60% 12 30% 12.90% Sedor SEUX NIA NA 19 60% NA 19 29% 17 90% Growth Est Current Otr Next Otr This Year Next Year Past 5 Years (per annum) Next 5 Years (per annum) Price/Earnings (avg. for comparison categories) PEG Ratio (avg. for comparison categories) Industry 22.10% 109.80% 11.00% 15.10% NA 15.22% S&P 500 2 80% 14.40% -0.90% 790% -24.00% 35.10% 11.20% 13.20% NA 15.10% NA 5.71% 32.74 17.49 19.99 7.71 1.83 2.37 188 1.99 Assumptions: 2016 Revenue Growth: 14.8% (High Case) and 9.6% (Low Case) 2016 Profit Margin and dividend payout ratio remain the same level as it was in 2015. At 2015 Year End, Starbucks is traded at $ 56.84 The beta for Starbucks is 0.76. assume risk free rate is 2% and market risk premium of 7% What is the stock price based on the information given above? 1) Using comparable P/E and P/B calculate the Starbucks stock price? 2) Using two-stage dividend growth model determine the Starbucks stock price. a. What is your growth rate for the first period? b. What is your growth rate for the second (forever) period? . Verizon 8:00 AM 85% Done Attachment 1 of 3 Starbucks Corporation Balance Sheets for 2015 and 2014 SOOD ODOS $ 7190 Predeces Deferred income and ment, net Long-term Property One Totale Good and wants Totalt Current Accounts payable Accrued expenses Other curren ties Totalcuments Long O long tama Common ock Och Sh 6 00.000 Starbucks Corporation Reported Income Statements for 2015 and 2014 ($ in 000.000's Done Attachment 2 of 3 Starbucks Corporation Reported Income Statements for 2015 and 2014 ($ in 000.000 2015 2014 Total net revenues $16.4478 Cost of sales $7775 $5.858.8 Gross profit $11.3752 Store operating expenses Other operating expenses Depreciation expense General and administrative expenses Total operating expenses $ 5.4111 $ 5224 $ 9939 $ 1.1967 $80241 $ 4,6382 $ 4573 7096 $ 6,7762 Operating income $ 3.351.1 $ 2.8128 Income from equity investees Interest income and other income Interest expense $ $ 249.9 3725 5205 $ $ 268.3 142.7 354) (EBT) 1597 Earnings before income Income tax expense $ 39030 $ 1.143.7 $ $ 1.092.0 Nutcome $ 2.7593 $ 20677 Earnings per share Share outstanding In 000 1.5063 Cash dividend declared perhe $0.30 50 54 Operating margin O Total metrovenes Income tax E ncome .Verizon 8:00 AM 17 85% Done Attachment 3 of 3 Earnings at Mys 2016 Rev Grow High Low Cases 2016 Profil Marina dividend pay the same as it was in 2015 A 2015 Yew End Sub traded 5684 The beta for Starbucks is 0.76 amerika s 2% and market risk premium of What is the stock price based on the information given above 1) Using comparable PE and Pickle the Starbucks stock price? 2) Using two-stage dividend growth model in the Starbucks stock price What is your growth rate for the first period? What is your growth rate for the second forever) 2014 Starbucks Corporation Balance Sheets for 2015 and 2014 ($ in 000,000's) 2015 Current assets Cash and cash equivalents $ 1.530.1 Short-term investments $ 813 Accounts receivable $ 719,0 Inventory $ 1,306.4 Prepaid expenses $ 3342 Deferred income taxes $ 381.7 Total current assets $ 4,352.7 $ 1,708.4 $ 135.4 $ 631.0 $ 1.090.9 $ 2856 $ 3174 $ 4.168.7 Fixed assets Long-term investments Property, plant and equipment, net Other assets Total foxed assets $ 664.5 $ 4,088.3 $ 1.244.8 $ 5,997.6 $ 833.3 $ 3,519,0 $ 1,1022 $ 5.454.5 Goodwill and intangible assets Total assets $ 2.095.8 $12.446.1 $ 1,129.7 $10.7529 Current liabilities Accounts payable Accrued expenses Other current liabilities Total current liabilities $ 6842 $ 1.760.7 $ 1.208.6 $ 3.653.5 $ 533.7 $ 1,514.4 $ 990.6 $ 3.038.7 Long-term debt Other long-term liabilities Total liabilities $ 2.347.5 $ 6253 $ 6,6263 $ 2,048.3 $ 3922 $ 5.479 2 $ 15 $ 41.1 Shareholder equity Common stock Paid-in capital Retained earnings Other stockholder equity Total stockholder equity Total liabilities and equity $ 5,974.8 $197.6) $ 5,819.8 $12.446.1 $ 07 $ 39.4 $ 5.206.6 $ 27.0 $ 5.273.7 $10.7529 Shares outstanding (000.000's) (Fiscal) Year-end stock price 1.495.9 $56.84 1.5063 $37.73 Starbucks Corporation Reported Income Statements for 2015 and 2014 ($ in 000,000's) 2015 2014 Total net revenues $19,162.7 $16,447.8 Cost of sales $ 7.787.5 $ 6,858.8 Gross profit $11.375.2 $ 9,589.0 Store operating expenses Other operating expenses Depreciation expense General and administrative expenses Total operating expenses $ 5,411.1 $ 522.4 $ 893.9 $ 1,196.7 $ 8,024.1 $ 4,638.2 $ 457.3 $ 709.6 $ 971.1 $ 6,776.2 Operating income $ 3,351.1 $ 2,812.8 Income from equity investees Interest income and other income Interest expense $ $ 249.9 372.5 ($70.5) $ $ 268.3 142.7 ($64.1) Earnings before income taxes (EBT) Income tax expense $ 3,903.0 $ 1,143.7 $ 3,159.7 $ 1,092.0 Net income $ 2,759.3 $ 2,067.7 Earnings per share Shares outstanding (in 000's) $1.84 1,495.9 $1.37 1,506.3 Cash dividend declared per share $0.80 $0.64 17.1% Operating margin (Ol/Total net revenues) Income tax rate (EBT/Income tax expense) 17.5% 29.3% 34.6% Earnings Est Current Dec 15 Next Year Sep 17 Current Year Sep 16 1.89 26.00 NA NA NA Avg Estimate No. of Analysts Low Estimate High Estimate Year Ago EPS NA NA 1.90 NA 189 033 1.58 Revenue Est Next Me Current Dec 15 5.398 Current Year Sep 16 21.638 Next Year Sep 17 23.498 5.048 25 Avg. Estimate No. of Analysts Low Estimate High Estimate Year Ago Sales Sales Growth (yearlest) 5.228 5.556 4.80B 4.95 5.138 4 56B 10.50% 21 328 22 000 19.16B 21.308 24 218 21.638 8.60% 12 30% 12.90% Sedor SEUX NIA NA 19 60% NA 19 29% 17 90% Growth Est Current Otr Next Otr This Year Next Year Past 5 Years (per annum) Next 5 Years (per annum) Price/Earnings (avg. for comparison categories) PEG Ratio (avg. for comparison categories) Industry 22.10% 109.80% 11.00% 15.10% NA 15.22% S&P 500 2 80% 14.40% -0.90% 790% -24.00% 35.10% 11.20% 13.20% NA 15.10% NA 5.71% 32.74 17.49 19.99 7.71 1.83 2.37 188 1.99 Assumptions: 2016 Revenue Growth: 14.8% (High Case) and 9.6% (Low Case) 2016 Profit Margin and dividend payout ratio remain the same level as it was in 2015. At 2015 Year End, Starbucks is traded at $ 56.84 The beta for Starbucks is 0.76. assume risk free rate is 2% and market risk premium of 7% What is the stock price based on the information given above? 1) Using comparable P/E and P/B calculate the Starbucks stock price? 2) Using two-stage dividend growth model determine the Starbucks stock price. a. What is your growth rate for the first period? b. What is your growth rate for the second (forever) period