Description
Digging into Earnings and GrowthPart OneReturn to the same MS Excel file you submitted for Dropbox 2. Under the Week 3 tab, gather the P/E ratio, EPS, dividend per share, and annual growth rate information about your chosen company and its closest competitor.Part Two In a memo to the Chief Executive Officer, answer the following questions, which are pre-loaded in your Memo Template:The P/E ratio helps investors determine the market value of a stock as compared to the company’s earnings. A high P/E could mean that a stock’s price is high relative to earnings and possibly overvalued. Conversely, a low P/E might indicate that the current stock price is low relative to earnings. Which company, as compared to its industry, is overvalued, undervalued, or perfectly priced? What data, reference, or ratios drew you to that conclusion?Based on the YoY annual growth rates of revenue % and net income %, which company is growing its top line and bottom line faster? What data, reference, or ratios drew you to that conclusion?Which of the two companies is the “better run company”? (Keep in mind that you will get posed this question for the next several weeks. Keep track of how you grow from this week to the next week with your response.)
Unformatted Attachment Preview
Memo
To:
Chief Executive officer
From:
Your Name
Date:
Date
Re:
Weekly Dropbox Memo #3
1. The P/E ratio helps investors determine the market value of a stock as compared
to the company’s earnings. A high P/E could mean that a stock’s price is high
relative to earnings and possibly overvalued. Conversely, a low P/E might
indicate that the current stock price is low relative to earnings. Which company,
as compared to its industry, is overvalued, undervalued, or perfectly priced?
What data, reference, or ratios drew you to that conclusion?Please be detailed.
(After answering this question, please remove the question.)
2. Based on the YoY annual growth rates of revenue % and net income %, which
company is growing its top line and bottom line faster? What data, reference, or
ratios drew you to that conclusion? Please be detailed. (After answering this
question, please remove the question.)
3. Which of the two companies is the “better run company”? (Keep in mind that you
will get posed this question for the next several weeks. Keep track of how you
grow from this week to the next week with your response.) Please be detailed.
(After answering this question, please remove the question.)
Please consider inserting the MS Excel chart in this section. If you do, there is no need
to upload the spreadsheet to Dropbox. Sample below.
To: Chief Executive Officer
From: Christopher Eusebio
Date: March 16, 2024
Re: Weekly Dropbox Memo #2
Analysis of Company Growth, Profitability, and Management Efficiency
1. Starbucks is experiencing higher revenues than its competitor McDonald’s. Their revenue
figures were very closely related at $31.9 billion in 2022 and $34.2 billion in 2023 and
were the primary focus in the comparison between the two years. On the other hand,
McDonald’s Corporation (2023) claims that, from $23 to $24.1 billion, the company’s
revenue increased by just 3.8%. The demonstration of higher top-line revenue by
Starbucks suggests the better top-line growth that such a company can reach using
effective tactics of product innovation, market penetration, and customer experience
improvement (Glowik, 2017; Pina & Dias, 2021).
The revenue growth of the Starbucks coffee brand is attributed to the aggressive mode in
introducing new beverage offerings, expanded food menu, technology updates to the improved
in-store experience, and a redesign of the store formats (Starbucks Corporation, 2023). In
addition, the fact that the company entered the developing world market and focused on rising
demand for premium coffee experiences globally gave a significant boost to its top-line growth
(Glowik, 2017).
2. As far as the profit is concerned, McDonald’s is winning than Starbucks. Starbucks
Corporation’s opearting income is $5.33 billion and net income is $3.55 billion, which is
according to the company’s fiscal year report that was published for 2023 and obtained from
the Google website. In response to profitability for this sector, Mathur and Patodiya (2016)
state: ‘To achieve profitability in this sector McDonald’s is a key player since it has the
flexibility to control the costs and able to budge operational strategies that lead to gain
profit.’
These numbers are further supported by Starbucks’ higher profit margin.
McDonald’s Corporation (2023), McDonald’s has been effective in using several cost
reduction tactics including menu simplification, supply chain optimization, and technology
applications which enhanced operational efficiency. In addition, the cost-benefit offerings and
strategic pricing strategies of the firm have also resulted in its profitability (Mathur & Patodiya,
2016, p. 582).
3. To find out which company is the “better run,” we need the full picture.
McDonald’s has better profitability and operational efficiency. Compared to Starbucks, it has
much higher margins and return on assets (ROA), indicating that it runs more smoothly.
Compared to McDonald’s, Starbucks is growing its revenue more quickly.This rate indicates the
company’s ability to improve its top line or its ability to promote products and services that
entice purchases – something that is crucial to its long‑run growth and sustainability. However,
other facets of a company’s performance are equally important in determining which firm is
better run. These include its brand reputation, customer loyalty, innovation record,
environmental and social measures, and corporate social responsibility (CSR) practices. These
cannot be ascertained from financial statements, although the accounting profession is making
some attempts to reveal them through new standards underway (Malik and Malik 2022; Pina
2021; Dias 2021).
Starbucks has long emphasized brand-building and customer loyalty through a focus on
quality, sustainability, and ethically sourced products (Starbucks Corporation, 2023). The
introduction of new features, such as mobile ordering and payments also brings a better customer
experience (Glowik, 2017).
Whereas McDonald’s has used its brand name and marketing techniques, such as menu
localization and placement advertising, to adjust its products and advertising to customers in
different countries. (McDonald’s Corporation, 2023).
References
Glowik, M. (2017). Global Strategy in the Service Industries. Taylor & Francis.
McDonald’s Corporation. (2023). Annual Report 2023.
https://corporate.mcdonalds.com/investors/annual-reports.html
Mathur, S., & Patodiya, P. K. (2016). Global perspective of fast food consumption: a systematic
literature review. Indian Journal of Management Science, 6(2), 46.
Pina, R., & Dias, Á. (2021). The influence of brand experiences on consumer-based brand
equity. Journal of Brand Management, 28(2), 99-115.
Starbucks Corporation. (2023). Annual Report 2023. https://investor.starbucks.com/financialdata/annual-reports/default.aspx
NVDA
1
Starbucks Corporation
Key Risks from the 10-K Report
Market Competition and Consumer Trends (Strategic
Risk), Commodity Price Fluctuations (Operational Risk).
Competition and Market Trends Risks
The risk associated with aggressive competition in the
specialty coffee business where price, convenience,
service, and product quality are crucial. There is strong
competition for business in all markets and channels,
which could affect profitability.
2
1
2
Operational Risks Related to Supply
Chain and Commodity Costs
The risk is related to the volatility in the price and supply
of key commodities like high-quality Arabica coffee
beans. Profits could suffer from unfavorable price
fluctuations or supply restrictions brought on by
unfavorable weather, political unrest, or economic
circumstances.
NVDA
McDonald’s Corporation
Global Market and Economic Conditions, Health and Safety
Compliance Risks.
Global Market and Economic
Conditions
The risk pertains to changing global market conditions and
economic downturns, which may impact demand and sales
across different geographic regions.
Health and Safety Compliance Risks
The risk involves adhering to health, safety, and food
quality standards across all outlets. Non-compliance or
safety failures can result in legal liabilities and damage to
brand reputation.
Analysis Memo Rubric
Course: FINC 350 CDE – BUSINESS FINANCE
Criteria
Content
Analysis
Level 4
Level 3
Level 2
Level 1
Criterion Score
20 points
17 points
14 points
0 points
/ 20
Data gathered
in the
Data gathered
in the
Data gathered
in the
Data gathered
in the
spreadsheet is
90% to 100%
accurate
spreadsheet is
80% to 89%
accurate
spreadsheet is
70% to 79%
accurate
spreadsheet is
below 70%
accurate or is
not present.
20 points
17 points
14 points
0 points
The
assignment’s
content is
thorough, well
organized, and
provides
critical thinking
into the
topic(s)
presented in
the course
material and
textbook.
The
assignment’s
content
addresses the
topic(s) for the
week and
shows thought
was given
to the topic(s)
presented in
the course
material and
textbook. Or
The
assignment’s
content is
evident;
however, it is
lacking in
critical thinking
or is not well
organized
to the topic(s)
presented in
the course
material and
No memo
submitted or
the submission
is below 200
words in
length.
Additionally,
the submission
is at least 500
words.
the submission textbook. Or
is between 400 the submission
and 499 words. is at least 200
words but not
300 words in
length.
/ 20
Criteria
Reference,
Spelling,
Grammar,
and
Mechanics
Level 4
Level 3
Level 2
Level 1
Criterion Score
5 points
4 points
3 points
0 points
/5
No issues with
spelling,
grammar, or
mechanics. The
reference
selected is
applicable to
the week’s
content. The
reference is at
the end of the
analysis, so the
instructor can
review the
Minor issues
with spelling,
grammar, or
mechanics. The
reference
selected is
applicable to
the week’s
content. The
reference does
not provide
either a title or
a link for the
article.
Several issues
with spelling,
grammar, or
mechanics. The
reference
selected is
applicable to
the week’s
content. The
reference is at
the end of the
analysis, but
the title is
mislabeled, or
Significant
issues with
spelling,
grammar, or
mechanics
make the
assignment
difficult to read
and
understand.
The reference
provided is not
applicable to
the week’s
reference.
Reference
follows current
APA format.
Reference
follows current
APA format.
the link is to an content. Or no
incorrect
reference was
reference.
provided.
Reference
follows current
APA format.
Total
/ 45
Overall Score
Level 4
Level 3
Level 2
Level 1
41 points minimum
38 points minimum
31 points minimum
0 points minimum
Purchase answer to see full
attachment
