For the macro analysis consider: Global connections for Starbucks Impact of busi
ID: 1222964 • Letter: F
Question
For the macro analysis consider: Global connections for Starbucks Impact of business cycle of Starbucks Sensitivity to monetary and fiscal policy, interest rates (level of debt?), inflation. Things such as interest rate sensitivity (or lack thereof) can be noted (in part) by examining the amount of debt that the company has – lots of debt means they are more sensitive to changes in rates (i.e., a capital intensive industry, where borrowing is imperative) for Starbucks For the company, the financial measure ‘beta’ (available on standard financial websites) provides some insight into the cyclical nature of the firm for Starbucks.
Explanation / Answer
beta speaks about the systematic risk of the firm which can not be minimized. and the business should be run with the risk and the benefits are associated with this risk. all the benefits should estimated at a given level of risk factors, or at a given level of risk investors choose better investments which provides better results.