Introduction In today’s increasingly competitive business environment, high quality of financial analysis and forecasting is essential for the long-term strategic success of any company. In the current paper, the most recent performance trends of Starbucks Corporation, a premium coffee retailer and roaster operating in the US, will be evaluated to see whether the company’s management is performing well in this domain. General Position and Business Environment As of now, Starbucks is one of the world’s largest roasters, retailers, and marketers of premium coffee, with operations in over 75 countries globally (Starbucks, 2017). The industry in which it operates is coffee retail and coffee shops, and the key products are premium coffee drinks, snacks, tea and other beverages, and handcrafted coffee. The largest share of sales is attributable to the American markets (70%), with an additional 14% belonging to China and the Asia Pacific and 5% — to Europe, Middle East, and Africa. According to Garthwaite, Busse, Brown, and Merkley (2017), some of the key competitors of Starbucks are McDonald’s, Dunkin Brands, and Costa Coffee. Three Selected Types of Risks The first risk mentioned in the Starbucks annual report (Starbucks, 2017, p. 10) is the market risk, which may arise from the deterioration of economic conditions in the US and globally. Due to this factor, discretionary spending amounts of consumers can be negatively affected, which would make the consumers switch to cheaper alternatives than Starbucks. As for the liquidity problems, this type of risk can be faced by a company in a situation when its short-term assets are not sufficient to cover the amount of the pending short-term liabilities. If this situation happened, Starbucks would need to attract additional funding at the above-market rates, given that such funds would be required in the short run. Lastly, the business risks defined by Starbucks include their failure to implement beneficial strategic initiatives and properly manage growth. These outcomes can be driven, for instance, by poor brand engagement and low levels of diversification. Financial Ratio Analysis Ratio analysis helps to explore the company’s financial health from different perspectives and observe its evolution over time. Liquidity Ratios The set of liquidity ratios reflect the ability of the company to cover its short-term liabilities with the amount of available short-term assets (Doumpos, Lemonakis, Niklis & Zopounidis, 2019). The two most popular measures of liquidity are the current and quick ratios, of which quick ratio is the most conservative as it does not include the number of inventories and other types of relatively less liquid current assets. Using the provided formulas and the data on financials provided in the Starbucks annual report (Starbucks, 2017), the ratios can be calculated as below. Current Ratio = Current Assets / Current Liabilities Current Ratio 2016 = 4,757.9 / 4,546.8 = 1.05 Current Ratio 2017 = 5,283.4/ 4,220.7 = 1.25 Quick Ratio = (Current Assets – Inventory – Prepaid Expenses) / Current Liabilities Quick Ratio 2016 = (4,757.9 – 1,378.5 – 347.4) / 4,546.8 = 0.67 Quick Ratio 2017 = (5,283.4 – 1,364.0 – 358.1) / 4,220.7 = 0.84 It can be seen that in both of the cases,