In today’s ultracompetitive society, we as consumers naturally depend upon and welcome coffee as a warm, caffeinated, familiar, (and for some, necessary) drink that keeps the worlds moving. In fact, Dunkin’ Donuts,’ an international coffee giant and one of the companies under study in this analysis, is known for its famous slogan “America runs on Dunkin.’” Dunkin’ Donuts was founded in 1950 in Quincy, Massachusetts by William Rosenberg. Dunkin’ Donuts was successfully operated by Rosenberg and even acquired its largest competitor Mister Donut in 1990 essentially paving the way for its expansion to serve as the coffee company of the United States and hopefully the world. Sixty-five years later, Dunkin’ Donuts is a global doughnut and coffee distributor with 11,000 restaurants in over 33 countries. Dunkin ' Donuts is part of the Dunkin ' Brands Group, Inc.
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The calculations for the 5 broad classes of financial ratios using the 2014 financial data offers evidence that shows which company had a better performance in 2014.
First off, Short-term solvency (or liquidity ratios) is defined, as the primary concern is the firm’s ability to pay its bills over the short run without undue stress. The results from the 2014 current ratio of Dunkin’ Donuts is 1.24 times and for Starbucks the current ratio is 1.37 times. So, another way to say that is that Dunkin’ Donuts has its current liabilities covered 1.24 times over while Starbucks has its current liabilities covered 1.37 times over, which is more. The textbook states that, “To a creditor—particularly a short-term creditor such as a supplier—the higher the current ratio, the better. To the firm, a high current ratio indicates liquidity, but it also may indicate an inefficient use of cash and other short-term assets.” (Page
The calculations for the 5 broad classes of financial ratios using the 2014 financial data offers evidence that shows which company had a better performance in 2014.
First off, Short-term solvency (or liquidity ratios) is defined, as the primary concern is the firm’s ability to pay its bills over the short run without undue stress. The results from the 2014 current ratio of Dunkin’ Donuts is 1.24 times and for Starbucks the current ratio is 1.37 times. So, another way to say that is that Dunkin’ Donuts has its current liabilities covered 1.24 times over while Starbucks has its current liabilities covered 1.37 times over, which is more. The textbook states that, “To a creditor—particularly a short-term creditor such as a supplier—the higher the current ratio, the better. To the firm, a high current ratio indicates liquidity, but it also may indicate an inefficient use of cash and other short-term assets.” (Page