Coffee Industry Investment Analysis Based on Indicators: Evidence from Dutch Bros., Starbucks and Luckin Coffee

Abstract

Coffee industry has developed for dozens of years and coffee is very popular for workers and students. However, due to the spread of COVID-19, the operation of coffee industry has been greatly impacted. This paper selects three company of coffee industry as samples to give investment analysis and suggestions. This paper uses the data collected from Yahoo Finance and basic formulae of six indicators (i.e., debt-to-equity ratio, cost of equity capital, levered beta, unlevered beta, weighted average cost of capital and return on assets). From the comparation results, Dutch Bros. was at economic loss. Starbucks had high liability but it won’t affect its normal operation and this corporation had relatedly impressive return rate. Luckin Coffee was at the stage of steady development but it had potential for progress because of its operating philosophy. This paper aims to analyze and compare the indicators of three companies in 2021 and then gives economic evaluation and investment suggestions. These results provide reference for future academic research and investment.