Jamb Juice was conceived and founded in April 1990, an exact year before I was born, by Kirk Person an avid cyclist ND healthy lifestyle advocate, who opened his first store In San Luis Obis, California (lamb Juice). He was later Joined In the business by three friends Joe Average, Kevin Peters, and Linda Kiowa Olds (lamb Juice. While the company has been on the decline, as I will discuss In this analysis, Jamb, Inc. Completed a thirty- five million dollar convertible preferred stock transaction, which is all theirs In June of 2016 (Jamb Juice).
Jamb, Inc. , through its subsidiary,Jamb Juice Company, owns, operates, and franchises Jamb Juice stores. Its restaurants offer whole fruit mouthiest, squeezed juices, hot oat meals, breakfast wraps, bistro sandwiches and mint-wraps, California Flatbeds, frozen yogurt, and various baked goods and snacks. While they are in the food industry, their top competitor is Struck. Struck Corp… Struck is an American global coffee company and coffeehouse chain based in Seattle, Washington.
Struck is the largest coffeehouse company in the world, with 20,891 stores in 62 countries, Including 13,279 in the united States, 1,324 In Canada, 989 In Japan, 851 in China, 806 In the United Kingdom, 556 In South Korea, 377 In Mexico, 291 In Taiwan, 206 In the Philippines, 179 In Turkey, 171 In Thailand, and 167 In Germany (Struck Corp..). They are also In the food Industry, but they are the single most successful coffee company in the world. Struck locations serve hot and cold beverages, whole-bean coffee, micro-ground instant coffee, full-leaf teas, pastries, and snacks.
Most stores also sell packaged food items, hot and cold sandwiches, and items such as mugs and tumblers (Struck Corp..). Struck Evenings locations also offer a variety of beers, wines, and appetizer after pm. (II) Current Issues: Jamb, Inc. Jamb Juice has been sneaking under the radar and while doing so, has somewhat ignored Wall Street. They have struggled like most other businesses during the past few years, but they are also riding the wave of growth right now rather smoothly. The weather is only helping their cause, and they have expanded their menu, but still maintained its healthfulness.
Even though Jamb, Inc. Reports weak numbers and statistics with their balance sheet and debt, they have made such a turnaround that they are beginning to get noticed more than ever before. Their Struck Corp… Struck has recently partnered up with Deanne to begin selling reek yogurt to reach out to the growing number of consumers of Greek yogurt. Unlike Jamb, Inc. , Struck has steadily performed well during the years, and they are constantly looking to expand their menu and company. In addition, they too are experiencing in rise in their sales, for the most part, across the board.
Like Samba, Inc. , they too alter their menu to reflect and appeal to the seasonal trends. (Ill) Ratios 1. Cash Ratio: This is found by taking cash + marketable securities divided by current liabilities. This is a perfect indication of the company’s ability to pay off their abilities (current) if for some reason immediate payment is necessary. In a sense, it determines how much money they are working with currently by looking at cash on hand and marketable securities which are quickly turned over. 2.
Quick Ratio/Acid Test: This is achieved by taking Current Assets, typically cash, accounts receivable, and notes receivable, minus Inventory, divided by current liabilities. The acid test is an exceptional means of determining the liquidity of cash. 3. Current Ratio: Take current assets over/divided by current liabilities for this straight forward ratio. Only main drawback is that this ratio excludes inventory, but the reason for that is because a lot of companies have difficulty with converting their inventory into cash. This can also lead to analysis being over or understated.
This ratio, like the quick ratio/Acid Test, is an exceptional ratio for determining if a company can handle their short-term obligations. 4. Receivables Turnover: By taking annual credit sales divided by/over accounts receivables with give you this ratio. In doing so, this ration shows how quickly a business collects its accounts receivables. 5. Inventory Turnover: This ratio is rendered by taking the cost of goods sold, for a time period, divided by average inventory. This shows how many times a firms inventory is sold and replaced during the period of time that it is calculated for. . Debt Ratio: This nifty ratio is found by taking total debt over/divided by total assets. This directly shows the amount of debt a company has relative to its assets. 7. Debt-to-Equity Ratio: We can find this by taking total debt divided by total equity. This ratio analysis measures/shows a company’s financial leverage. 8. Payout Ratio: This ratio makes p where the dividend yield ratio lacks. By taking Dividends per share divided by earnings per share, we can determine our future rate of return and whether or not it will translate into a low one or a high one. 9.
Gross Profit Margin Ratio: We can find this by taking sales, less cost of goods sold, divided by sales. This shows us the profit we make on our sales, but it does not include other costs that might impact the profit. 10. Return on Assets: This is found by taking net income divided by total assets. This is important because it shows how effectively the firm’s assets are being used to generate profit. ‘V) Excel Workbook: The Excel workbooks for both Jamb, Inc and Struck Corp… Have been completed, and they are both functional. Please see attached Excel workbooks for completion.
WOK 3: Vertical Analysis Jamb, Inc. – Thankfully for Jamb Juice, their largest and most significant assets account is always Cash and their next account is between accounts receivables or net and receivables translate into that the company is making money and has easily convertible accounts into cash, if needed. As far as their Liabilities are concerned, Jamb Juice has a high volume of short term loans. As an investor, I would hope that ash on hand is close to the amount that is in the short term loans account, this way I can monitor and determine how efficiently the company will be paying off the debt.
At the same time, a high volume of short term loans can be a good sign, too. This could indicate that the company is entirely capable of incurring debt and then paying it off immediately. Besides preferred equity, Revenue is Jamb’s largest account. In fact, Jamb’s revenue is always astronomically high, and typically, their cost of goods sold is only half of the amount in Revenue. In addition, this is why their profit hasn’t Allen below 70 million. For this smaller corporation that is rather impressive. Jamb Juice has currently included more items on their menu, other than their smoothies.
Some of them are oatmeal, bagels, wraps, and cereal. They are trying to become a solid source of proper nutrition in a more simplistic manner. Struck – Unlike Jamb, Struck largest asset account is, currently, Inventories, but their most consistent and typical largest account has been Cash. Also, if their marketable securities were to be included as cash on their balance sheet than their Cash account would always be the largest. Similarly, Struck largest Liability account is short term loans, but their next largest account for liabilities would be their Long-term debt.
As I said with Jamb, this is a very good indicator the company is doing well. They not only have a significant amount of short term debt, but also long-term. However, between their cash and marketable securities, Struck is entirely capable of taking on even more debt with not much off problem. Their revenue and profit are even more welcoming. A huge factor as to why Struck can maintain their success is by their creative and innovative new ideas. They are now partnering up to become a yogurt and Greek yogurt powerhouse.
I say powerhouse because they will be one of the few corporations, fast food chains that is selling and providing Greek yogurt as an option. They, too, have sweet and succulent pastries, but theirs is typically accompanied with high quality coffee or smoothies. II: Vertical Analysis Again, Struck percentages are much more welcoming than that of Jamb, but these percentages do illustrate that both companies have been on the rise since 2008. Both companies have been doing what they can to swim and remain afloat ruing the troubling times.
In addition, we can also see that both companies report just over half of their assets under current assets. Also, this percentage which is about 54% for both has increased from only 30% back in 2008. This is a very good for both companies to illustrate how much their current assets and convertible accounts have increased. This alone, is a huge indicator of how both companies have established themselves in one of the hardest economic times. In my opinion, there are 3 ratios, in particular that stand out above the rest for vertical analysis. They are accounts receivable turnover, inventory turnover and current ratio.
It is very important and smart for companies to closely monitor not only their inventory, but also their A/R frequent turnover. Both of these ratios demonstrate how quickly cash immediate as possible, too frequent of a turnover for inventory can be alarming because it shows the company is sitting on too much money and not doing anything with it. WOK: Holy Grail Jamb Juice: Jamb Juice MBA) has successfully performed the hardest part of its turnaround story, having recently reported its first fiscal year of net income since coming a public company.
The company is now expected to grow revenues and deliver increasing PEPS, thus becoming an attractive proposition also for growth/value investors. A successful R/S reduced the number of OSI and resulted in a stock price well above the $5 mark that is often needed by some institutional investors to consider building a position. A large market opportunity, an asset light business model, good brand recognition and a secular trend toward healthy food should push the company’s value higher – we see a double from here in the long term (patient investors needed).
Background – The financial and strategic turnaround (Blend 1. 0 + Blend 2. 0) On March 13, 2006, Jamb Juice agreed to be required by listed Services Acquisition Corp… International for $265 million (roughly its market cap as of today). Upon the closing of the transaction, Services Acquisition changed its name to Jamb, Inc. The company grew very quickly, adding up too many employees, and invested a lot of capital as most shops were company owned. Some units did not perform well at all, and Jamb’s key metrics (ASS, margins, etc. ) started declining.
PEPS and FCC were active. Today’s CEO, James White, was asked to Join the company in 2008 to turn it around. His strategy consisted, among other actions, in the following activities: close down non performing shops, re-franchise several company owned ones (more than 170 to date), reduce headcount (costs), bring new talent to the management team, build a healthy, active lifestyle brand out of a trade name mainly associated to smoothies, reduce short term debt through a $35 million capital infusion, increase Jamb’s product offering throughout the day.
As a result of re-franchising several many owned shops, revenues decreased quite dramatically, as we try to highlight in this chart comparing revenues per quarter in 2009, 2010 and 2011 Samba’s business is quite seasonal): Struck Corporation: Struck Corporation (SUBS) 2013 Annual Meeting of Shareholders Conference Transcript March 20, 2013 1 PM ET Howard Schultz – Chairman, President and CEO Thank you. Thank you very much. Thank you. Good morning. And welcome to the Annual Meeting of our Shareholders, our 21st meeting as a public company.
Well, you are not going to clap for everything, are you? We’ve had such a great year that I thought we’d start the meeting by asking all of the Struck partners who are here to stand up and be recognize and for our shareholders to give them a warm round of applause. Thank you. And there are thousands more watching the event on webmaster and thank you all very much as well. With us this morning as well are our partners PlГacid Arrange from Spain, would you please stand and be recognize, and [Hymn Sun] from Japan, please standup. Thank you.
Thank you. Well, as we meet here this morning, in many ways Struck Coffee Company is healthier and stronger than reaps any other time in the history of our company. There are over 18,000 stores in 62 countries serving about 70 million customers a week and there are about 200,000 Struck partners proudly wearing the green apron. In addition to that outside of our stores, there is now over 100,000 points of distribution for Struck coffee in places that we never believe we could be and that business today is over a $1 billion in sales.
Our stock price depending on the day this week is nearing its all time high and the market cap of your company is $43 billion. We’ve experienced a 38% return or our shareholders this year, not bad. And but also I would say that as you all know, the mission, the guiding principles and the purpose of Struck has always been beyond Just making a profit. To say it another way I think that what we’ve try to do especially over the last couple of years is build a performance-driven organization and manage the company through the lens of humanity.
And that probably has never been more true than this past year, maintaining healthcare for our partners at a cost of about $221 million this year, realize gains this year from Bean Stock, the stock option program over $200 million for managers and below and the work that we’ve done, domestically and internationally in the communities that we serve, constantly trying every step of the way to balance profitability with a social conscience. Now, two years ago, I share with you this slide which depicted the original 1928 DOD 30.
And if you hear two years ago, I said after 85 years, it’s almost stunning to think that only one company remains from the original DOD 30 and that is GE. I also said at that time that our aspirations as a company, as an organization, as a culture within the many is to one day aspire to be in the class of a company like GE. So you might imagine that last month when Fortune magazine came out with their list of the 100 most admired companies in the world that we woke up and saw that Struck coffee company was the fifth most admired company in the world.
Now, the people that work with me know that my first response is who is the four before us. And I can tell you that one day we’ll stand here before you and we will be the most admired and respected coffee company or company in the world. That is our ambition. Now, what’s Enid being respected and admired is probably the most important attribute of any company especially one that is a consumer brand like Struck. And that is the reservoir of trust that you build with your people, your customers, the communities you serve, your shareholders and multiple constituencies.
And that trust that Struck has been built in a very unique way, not through marketing, not through advertising but really quintessentially by the experience that happens. Also, their CEO stated that their stance and support of Gay of gay marriage is their direct support of diversity. Struck Corporation The first and one of the most important ratios Struck uses is the Dividend Yield Ratio. Dividend yield ratio is the ratio of dividend paid by the company annually to invested in the equity. It can also be termed as investors’ return.
Investors can use this ratio in two ways. Struck compare their stock to competitor companies. If the competitors have low ratios they are doing better and higher ratios reflect upon a company’s struggles. The next ratio would be the Debt to equity ratio. The Debt to equity ratio is calculated by dividing liabilities by the equity of shareholders. This ratio shows that how much equity the company is investing for its assets. Higher ratio shows that the company is investing largely for the long term plans and it has sound future prospects.
Struck has made many of their investments into their equity, which is clearly a good sign for them and their investors. The last one would be Dividend payout ratio. It is the percentage of the earnings which are paid by the company to its investors in the form of dividend. This ratio is in real the measure that how much the company is paying back to its stockholders. Dividend payout ratio is ore useful for the investors, who are willing to do a long term investment in stocks. Mature and stable companies have higher payout ratio as compared to other companies of the industry, which Struck Corporation does.
The first one I’ll point of for Jamb Juice is the price earnings ratio. Price to earnings ratio is the ratio of market price of the share to its earning. Earnings per share (PEPS) used in this ratio is calculated in different ways. Mostly it is calculated from the last four quarters. This ratio shows the expectation of the investors about the stock, the Geiger the PEE ratio the higher the expectation for the stock to be profitable. This ratio, alone, is almost meaningless, unless it is compared with the PEE ratio of the other companies of the same industry.
Investors can analyze by comparing the PEE ratios of the companies of any industry. After looking at Jamb Juice in comparison to their competition they are doing rather well for their size and keeping their profitability high, and they kept their statistics and percentages high as well. The next ratio is the earning per share ratio. This ratio can be calculated by dividing net income earned n the given period of time by the total number of shares outstanding in the same period. Usually weighted average of the number of shares outstanding is used in the formula.
