Finratios
Comapies selection: Report is covering review of financial performance of Tim Horton’s Corporation. As a benchmark Starbuck Company was selected. Both of the companies operate in the same industry sector, approximately in the same region and provide almost the same service, with the exception that Starbucks products are priced higher.
Data collection: Financial statements were collected from Yahoo finance web site.
Ratios analysis: * Debt ratio- a ratio that indicates what proportion of debt a company has relative to its assets. The measure gives an idea to the leverage of the company along with the potential risks the company faces in terms of its debt-load.
Tim Horton’s financing is more coming from debt, and in 2011-2012 time range debt financing has increased. While Starbucks is more financing is much more comprised by equity. It makes Starbucks less riskier for investing purposed than Tim Hortons.
| Tim Horton’s | Starbucks | | 2012 | 2011 | 2012 | 2011 | Debt ratio | 0.4790 | 0.4762 | 0.3784 | 0.4043 |
* Times interest earned- a ratio that indicates how many times a company can cover its interest charges on a pre-tax basis; measure a company 's ability to meet its debt obligations. Failing to meet these obligations could force a company into bankruptcy.
As a result of carrying fewer debts, Starbucks times interest ratio is much stronger than Tim Horton’s. Moreover due to the fact that Tim Horton’s is heavier relying on debt, interest rate for borrowing can be higher for them than for Starbucks.
| Tim Horton’s | Starbucks | | 2012 | 2011 | 2012 | 2011 | Times interest earned | 17.6371 | 18.9827 | 61.0826 | 51.9069 |
* Net profit margin- a ratio of that measure how much out of every dollar of sales a company actually keeps in earnings. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors.
As it was mentioned above, Starbuck is more premium
Data collection: Financial statements were collected from Yahoo finance web site.
Ratios analysis: * Debt ratio- a ratio that indicates what proportion of debt a company has relative to its assets. The measure gives an idea to the leverage of the company along with the potential risks the company faces in terms of its debt-load.
Tim Horton’s financing is more coming from debt, and in 2011-2012 time range debt financing has increased. While Starbucks is more financing is much more comprised by equity. It makes Starbucks less riskier for investing purposed than Tim Hortons.
| Tim Horton’s | Starbucks | | 2012 | 2011 | 2012 | 2011 | Debt ratio | 0.4790 | 0.4762 | 0.3784 | 0.4043 |
* Times interest earned- a ratio that indicates how many times a company can cover its interest charges on a pre-tax basis; measure a company 's ability to meet its debt obligations. Failing to meet these obligations could force a company into bankruptcy.
As a result of carrying fewer debts, Starbucks times interest ratio is much stronger than Tim Horton’s. Moreover due to the fact that Tim Horton’s is heavier relying on debt, interest rate for borrowing can be higher for them than for Starbucks.
| Tim Horton’s | Starbucks | | 2012 | 2011 | 2012 | 2011 | Times interest earned | 17.6371 | 18.9827 | 61.0826 | 51.9069 |
* Net profit margin- a ratio of that measure how much out of every dollar of sales a company actually keeps in earnings. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors.
As it was mentioned above, Starbuck is more premium