Financial Analysis to Predict Company’s Future Essay

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Financial analysis can be an effective way to predict the further development of the company. It provides valuable information about successful business decisions and their impact and will also help prevent problems committed by the company in the past. An example of such a company could be Starbucks, which conducts a productive policy in this area. Thus, the analysis of this indicator will also help the company investigate its stability and profitability.

An example of a company for which a financial analysis can be carried out can be Starbucks. This organization is famous all over the world and has won a reasonably high level of customer loyalty. Sources state that “Starbucks’ net revenue reached 24.61 billion U.S. dollars in 2021, reflecting an increase over the previous year’s” (“Net Revenue of Starbucks,” n.d.). People know Starbucks from coffee shops that are available in almost every country. The primary method of collecting financial data for the organization under investigation is the Cost Method. With its help, Starbucks has sufficient stable development and is an attractive investment for interested parties, as it can predict its further development.

The financial analysis of any organization includes an assessment of the impact of external and internal factors on its functioning. For a more successful implementation of this process, it is necessary to develop a balance sheet and a cash flow statement, which will be considered the main aspects (Vogel, 2020; Langemeier, 2020). Then it is possible to conduct a study of the industry in which the company is involved, the most productive strategies to apply, and an analysis of competitors’ policies to calculate the necessary changes.

Therefore, it can be argued that a deeper look at the economic aspect of the organization’s activities in the past and present can contribute to forecasting further development and creating of the most effective strategy. Moreover, it will help to assess the past and current state of the organization soberly and correctly. Starbucks is an example of a global company that resorts to using this type of research.

References

Langemeier, M. (2020). Market value balance sheet and analysis. Center for Commercial Agriculture, Purdue.

(n.d.). Statista. Web.

Vogel, H. L. (2020). Entertainment industry economics: A guide for financial analysis. Cambridge University Press.

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IvyPanda. 2022. "Financial Analysis to Predict Company's Future." December 15, 2022. https://ivypanda.com/essays/financial-analysis-to-predict-companys-future/.

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IvyPanda. "Financial Analysis to Predict Company's Future." December 15, 2022. https://ivypanda.com/essays/financial-analysis-to-predict-companys-future/.

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