HORIZONTAL ANALYSIS: GROUP 3

In Partial Fulfilment of the Requirements for

FM101 Financial Analysis

NARIDO, RUBY JANE

NIÑAL, MARIFE
OLAYON, ANGELICA
REYES, KRISTINE LOUISE
SIOS-E, JHONNEL JR.

DECEMBER 2023
5 Years income statement of
SBUX company
 ANALYSIS
••SALES
2019
2020= -11.27%
2021= 23.58%
2022= 10.9%
2023= 11.55%
- The company’s sales revenue witnessed a downturn in 2020, dropping by
11.27%, reflecting a challenging year. However, in 2021, there was a substantial
recovery with a remarkable 23.58% increase in sales, indicating a robust
turnaround. The following years, 2022 and 2023, demonstrated consistent growth
trends, showing increases of 10.9% and 11.55%, respectively, albeit at slightly
diminishing rates. Overall, the company navigated through a challenging period,
rebounded strongly, and maintained a steady growth trajectory in subsequent
years.

••COGS
2019
2020= -3%
2021= 10.56%
2022= 15.39%
2023= 8.55%
- From 2019 to 2020, the company reduced its Cost of Goods Sold (COGS) by -
3%, . However, a subsequent increase of 10.56% in 2021 suggested rising
production expenses. This trend continued notably in 2022 with a significant
15.39% surge in COGS, signifying a substantial rise in operational or
manufacturing costs. Despite a continued increase of 8.55% in 2023, the rate of
growth in COGS appeared to slow down, possibly indicating efforts to stabilize or
manage production expenses more effectively.
•• GROWTH INCOME
2019
2020= -44.21%
2021= 106.41%
2022= -4.36%
2023= 23.88%
- Throughout the observed timeline, the company’s growth income displayed
considerable ups and downs, oscillating between negative and positive
percentages. In 2020, there was a significant drop of 44.21%, succeeded by a
substantial surge of 106.41% in 2021. Subsequently, there was a decline of
4.36% in 2022, followed by a modest recovery of 23.88% in 2023. These
fluctuations indicate a dynamic and fluctuating financial performance with varying
levels of growth and contraction annually.

••SG&A Expense
2019 =
2020 = -7.89%
2021= 18.63%
2022= 5.12%
2023= 20.13%
- The SG&A expense from 2019 to 2023 shows fluctuations over the year. As
shown in 2019 to 2020 the result of its variance indicates a decrease as it has a
negative value, where it needs to have efficient improvement. During 2021, there
was a significant increase as the result was 313 means it has an increase in
operational costs. While from 2022 to 2023 the company may have control over
its expenses as it showed positive value.

••EBIT
2019=
2020= -61.15
2021= 207.51
2022= -8.32
2023= 25.65
 - During 2019-2020 the result of EBIT in the company was negative, where the
company experienced financial challenges. However, in 2021 the company
recovered on its EBIT as it showed positive value. In 2022 the company returned
to negative results which it has -388, where the company needs to renewed
challenges, especially in terms of profitability. In the current year(2023) the
company gained a positive amount which indicates partial recovery, and the
company needs to continue its financial improvement.

•• INTEREST EXPENSE:
2020: 34.71%
2021: 1.96%
2022: 5.3%
2023: 10.3%
- The interest expense increased on 2020 from 2019 which means that the
company's financial composition was focused more on paying obligations to the
debtors. In this situation, the variance is 118 which is seemingly high compared
to year 2021, 2022, and 2023. This is due to an economic dilemma: the covid 19
which has led to an increase of company obligations. However in 2021, the
interest expense have recovered with 1.96% on a variance of 9, which have
plunged from 34.71% with 118 variance. The interest expense have slowly
stabilized on 2022 and 2023. The company have slightly increased their expense
on 2023 with about 10.3% which indicates that they are starting to control their
operations.

••INCOME TAX:
2020: 7.79%
2021: 23.8%
2022: 51.16 %
2023: 12.75%
- The company's income tax was stable on 2020 in spite of the economic dilemma,
However, a visible increase of spending have seen on year 2021, specially on
2022 which increased to 51%. This indicates that they are paying more tax than
the previous year. Several factors are considered in this situation, one is, the
 changes in tax policies. In 2023, income tax rate is 12.45 which is a positive
indication from the policy changes.

•• NET INCOME
2019
2020= -74.21%
2021= 352.47%
2022= -21.83%
2023= 25.68%
- Over the analyzed period, the company’s net income showed considerable
variability, fluctuating between negative and positive values. There was a
significant drop of 74.21 in 2020, followed by a remarkable increase of 352.47 in
2021. However, this surge was succeeded by a decline of 21.83 in 2022,
followed by a moderate increase of 25.68 in 2023. These fluctuations indicate a
volatile financial performance with alternating periods of substantial growth and
decline in net income.