Usage of Beta in Risk Analysis of Coffee Retailers: Study of Dutch bros and Starbucks

Author:

He Qishu

Abstract

As a beverage favoured by consumers around the world, coffee and coffee market is developing rapidly. There are now many coffee retail companies running famous coffee brands, whose business mode and feature are worth analyzing. This article selects Dutch bros and Starbucks as example, and uses equity beta and asset beta to find out the state of business and risk of the two companies. The data shows that Dutch bros is more unpredictable with higher risk. On the other hand, Starbucks has a steady cash flow and return despite of high equity beta and unusual negative asset beta. The analysis also points out that fiscal data alone may be misleading while looking into a company, and other factors including stage of development and company policies shall be taken into consideration as well.

Publisher

Boya Century Publishing

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