IndexSummaryIndustry and Company OverviewEvidenceConclusionWorks CitedSummaryLong-term investments are significant for most people or businesses as they help bring a profitable income to an individual or business. Anyone or business should understand the company to invest in and understand the various sections of the financial statement to do proper analysis to determine which company to invest in. I have to consider two companies, Starbucks and Dunkin' Donuts, which are a coffee brand, stores and products familiar to most people around the world. Both companies are publicly traded on the NASDAQ, and consumers can invest in either company to profit themselves or their business. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay After careful research with the two companies, I would prefer to invest long term with Starbucks to see consistent profits over time. With the correct analysis I created with the financial statements of Starbucks and Dunkin Donut, it will be concluded that Starbucks will maintain consistent profitability over time compared to Dunkin Donuts. After reading this article, you will explore various reports and analyzes that suggest that Starbucks will deliver a significant outcome for long-term investors compared to Dunkin' Donuts. One primary significance that Starbucks demonstrated superior to Dunkin' in the study is that Starbucks demonstrates higher shareholder value, which investors appreciate. Dunkin' Donuts is an excellent company with shares in better financial statements than Starbucks, but overall Starbucks offers a better long-term investment for shareholders or stakeholders. Industry and Company Overview Coffee is a popular beverage around the world that consumers love to drink or prepare. Coffee is caffeine, and any caffeine should bring more alertness to someone's attention or even a little energy to a person. People will drink coffee before going to work or even while they are working on something. The coffee shops or products are available everywhere in the world and are easily accessible to the needy consumers. We can find these coffee shops in almost any local community or city and we can see the product in almost any grocery store or gas station. Coffee shops are not just a place to get a drink, but understanding coffee shop culture means bringing more people together. The culture brought meetings, first dates or enjoying life by sitting down and drinking coffee. There are so many coffee shops in the world like Starbucks, Dunkin' Donuts, Tim Hortons and more available to consumers. In the United States, Starbucks and Dunkin' Donuts are the most popular coffee shops. Living in Seattle, Washington, we can see that there is a Starbucks on almost every corner and it is easily accessible. Dunkin' Donuts is famous throughout the East Coast of the United States and convenient for every consumer. The reason I would invest in one of these two companies is that you can imagine if coffee is so accessible to all consumers, you can imagine how busy Starbucks and Dunkin' Donuts will be. Starbucks is well known in Seattle, Washington and all other countries. in the world because it is the leading coffee brand. The company is known for its "roasting, marketing and retailing of world-class specialty foods." Starbuck stores offer high-quality coffee and will serve tea, high-quality food products and other coffee-based beverages. Starbucks aims to help with various healthy items on their menu and ensure that their products are beneficial to customers.They also created coffee products that consumers can purchase from the store instead of traveling to coffee stops. Their coffee shops are designed to provide consumers with important spaces to meet, study, read and more. The company has several market strategies to compete in the coffee industry and had made investments to improve its company in the long term. Starbucks competes with any other coffee shop or company with a small market with fast food restaurants. The company seeks to treat its employers with due respect by offering good wages, benefits, and opportunities for education or growth. Dunkin Donuts is a restaurant famous for its coffee and donuts, but it has opened up the market to various foods. The company has provided multiple food options and made them accessible to its consumers for the industrial market. Dunkin Donut is one of the largest "quick service" restaurants in the world and is in the leading market with competitive markets. We may not see many Dunkin Donuts on the West Coast, but we do have many Baskin-Robbins, which is franchised by Dunkin' Donuts. Baskin Robbins is an ice cream shop that mainly serves ice cream and cakes to its consumers. Dunkin' Corporation operates in 60 countries around the world and would allow more to open if there was adequate distance between them. The company has four different segments: Dunkin' Donuts Domestic, Dunkin' Donuts International, Baskin Robbins Domestic and Baskin Robbins International. Most of the revenue will come from the domestic market, while a small contrition will come from the international one. The company is growing and becoming more popular than in the last couple of years. It has significant competition with Starbucks, but as they open more food menus with their service, they are competing with various quick service restaurants and food outlets. Evidential Issue Short-term liquidity ratios can determine which company to invest in for the long term by looking at how efficiently the company can pay off its debt. I had analyzed the short-term liquidity of both companies and found that both companies increased after year 1 and then decreased after year 3, due to various investments. We can look at some key ratios that can help determine long-term investments such as the current ratio, acid test ratio, accounts receivable turnover and working capital. In Year 1, Dunkin Donuts started with a current ratio of 1.33 and increased over time through Year 4 to 1.51. Between year 1 and year 4, the company saw a significant increase, then a slight decline between these two years, but still with a more excellent ratio than in year 1. We can review the acidity index to determine whether Dunkin' can pay its liabilities and whether it is favorable to make long-term investments. In year 1, Dunkin' will start at 0.93 and increase in year 4 to 1.22, rising and falling in years 2 and 3. Investors would like to know how the company can turn its products into cash with Dunkin' on the rise over the past four years. Working capital at Dunkin' has increased over time, with substantial increases and then decreased over time. Starbucks has a similar relationship and the same analysis with Dunkin, but comparatively Dunkin' did better than Starbucks. The current ratio decreased over time from year 1 from 1.05 to 0.92 for year 4, with a significant decline from year 3 to year 4. Analyzing the acid-test ratio, we can also see that there was a slight decline in year 1 as .64 to year 4 as .58. The information shows that the company has a lower ability to meet current obligations because the current ratio and the acid-test ratio have decreased. Thelevel of the current ratio and the acid-test ratio is at the lowest level in the last four years. Starbucks has proven better than Dunkin' at quickly converting products into cash by seeing a steady increase over the past four years as Dunkin' rises and falls. I assume that Starbucks is making more significant investments than reducing its reporting results to Dunkin' Donuts. The capital structure will demonstrate outstanding debt and equity capital and that information will inform us how the company is growing positively with its financial income. After careful analysis of the statements and 10Ks, I concluded that both companies are highly dependent on long-term liabilities, which shows that the companies have a high level of debt. We can review the financial statement and focus on the various securities issued by the company. Dunkin' Donuts has treasury stock consistent over the past four years at -0.03% and common stock between year 1 at 92 and year 4 at 82. Starbucks has common stock consistent over year 1 at 1.50 to 'year 4 at 1.20. Both companies have a similar situation with the capital structure and would suggest choosing Starbucks because it offers a slightly better ratio analysis. After understanding the capital structure of both companies, we need to explore the return on invested capital to demonstrate the effect on the profits earned by the company. The data shows that Starbucks is more solvent than Dunkin' Donuts due to its huge total debt to equity, current liabilities to total liabilities, earnings to fixed expenses, and cash flow to fixed costs. We can review the financial statements of Starbucks and Dunkin Donuts to demonstrate that Starbucks is more solvent. Total debt to equity of Starbucks in year 1 was 1.43 and reduced to -4.08 in year 4. The company recorded reductions every year from year 1 to year 4. Dunkin Donuts had started in Year 1 with -15.48 and had increased to -5.85 in Year 4, which is still lower than Starbucks, and Starbucks can expect an excellent growth rate. Another piece of information we can look at is that of cash flow to fixed expenses because the results are substantially different, from Starbucks starting at 75.76 in year 1 to dropping significantly to 18.88 in year 4. While Dunkin Donuts it had 1.92 in year 1 and increased in year 4 to 2.09. I understand that Starbucks has suffered a significant decline over the four years, but the information shows that it would still be superior to Dunkin' Donuts. Overall, the information provided in the return on invested capital explains that Starbucks is a better company to invest in than Dunkin' Donuts. Dunkin' has had little to no growth with any profitable revenue earned and the company has remained consistent. As you can explore, Starbucks had significant growth or low growth with the profits they had made. We can look at both the company's ROCE and RNOA results and would conclude that Starbucks has better industry growth than Dunkin'. As an investor, I would definitely invest in Starbucks for the long term with the information provided because I can positively see growth with my investment. At the same time, Dunkin' would show little growth or stability. Asset Usage is essential to understand when deciding on long-term investments because it will demonstrate how the company uses its assets and manages them. This information represents ratios such as cash equivalent, accounts receivable, inventory, working capital, and various assets. We can determine that Starbucks has better resource utilization because it uses more sales per dollar thanresources invested compared to Dunkin' Donuts. Analyzing the results, it shows that Starbucks did much better than Dunkin. In looking at year 4, the cash equivalent was around 2.55 with Dunkin' and Starbucks at 9.87, which is a clear difference. Another outcome to explore would be Credits, and in year 4 Dunkin' is at 17.40 and Starbucks is at 30.15 with a significant difference as well. The other balance sheet ratios show notable variations in different years between each company and demonstrate that Starbucks is better. Financial forecasts are essential for companies and investors to determine the future profit growth or decline the company may face. I believe that to decide on long-term investments it is necessary to understand and know this data because we can determine the returns on investments. When we look at both companies, we can conclude that both performed well in the first and second years, but already in the third year the market for both businesses collapsed and revenue decreased. After the third year, both companies had successfully tilted the market shares and revenues, but we need to determine which company did better. I have been doing calculations and reports for four years and the data results show that Starbucks has done a little better than Dunkin' Donuts. After forecasting the balance sheet and income statement, he came to the conclusion that Starbucks can do better than Dunkin' in the long term and would be profitable for long-term investment. There may be many reasons why Starbucks may be more popular than Dunkin' Donuts, but the main reason why I believe Starbucks can offer more "coffee culture". Most people love to drink coffee or coffee-based drinks and the consumer's first example would be a coffee shop. Dunkin's Donuts is becoming and is a "fast food" restaurant instead of a coffee shop where you can get a quick drink. Starbucks has also made large investments that should see significantly positive progress on long-term investments. After careful analysis with the two companies, we can determine that Starbucks would be the best long-term investment in the coffee industry. Dunkin' Donuts is an excellent company and would be preferred for short term investments or "quick turns", but for the long term Starbucks would be preferable. The data showed that short-term liquidity was favorable to Dunkin' Donuts and operating performance with profitability. Although it can be observed that Starbucks was more solvent in invested capital, Starbucks has better asset utilization and has higher shareholder value. We may also find that Starbucks, in the long run, would be run more efficiently than Dunkin' Donuts. A critical factor in reviewing this analysis is the stock as an investment between the two companies because it would be an essential piece of data for the investor. he would know. We can review Dunkin Donut at year 1, starting the P/E ratio at 37.13, with a decrease in overtime at year 4 at 23.57. This is a steady decline and I would accept it declining further over time unless the company decides to invest in a positive way. They have kept it stable with their company, while Starbucks has achieved positive growth and investments. Starbucks has a year 1 price per share ratio of 27.17 and year 4 growth of 30.18. The company can demonstrate future growth and receive positive shareholder and stakeholder growth. Conclusion After all the analysis, the company I would choose for long term investment would be Starbucks because the company has better ratio analysis and better outcome for the future. Starbucks had predicted.25