Wine Industry Financial Analysis Essay -- GCSE Business Marketing Cour

Wine Industry Financial Analysis DESCRIPTION OF BUSINESS Canandaigua Brands, Inc. (formerly Canandaigua Wine Company, Inc.) is a producer and supplier of wine and an importer and producer of beer and distilled invigorate in the United States. It maintains a portfolio of over 130 national and regional brands of beverage alcohol which are distributed by over 850 wholesalers throughout the United States and selected outside(a) markets. Its beverage alcohol brands are marketed in three general categories wine, beer and distilled spirits. Brands include Paul Masson, Manischewitz, Monte Alban, Almaden, Bartons Gin and Corona Beer.MANAGEMENT PERFORMANCE oversight performance is genuine.Canandaiguas return on assets is better than the industry standard for 1998, and just under the industry standard in 1997. The companys focus has been able to improve the companys ROA by almost doubling net income from the prior year. Management has in the past done a good job of utilizing its assets, a nd by the latest results is doing an even better job. Canandaiguas gross margin(25.62) is less than the industry standard(43.80%). It appears that the companys production costs are greater than others in the industry. Profit margin(6.78%) is greater than the industry standard(6.64%) in 1998. Canandaigua is very good at controlling selling & general administrative expenses. Higher sales in 1998 resulted primarily from additional beer sales, largely Corona Beer sales, additional table wine sales and additional spirits sales. The company has increased its return on general stockholders equity(12.84%), compared to the industry standard of 10.89%. Canandaigua does a fair job of controlling borrowing. Interest expense was reduced by ... ...ompanys operating bout is very lengthy. Although, assuming most payables are due net 30, Mondavi appears to pay their bills on an average of 3.8 days early. LONG-TERM LENDORSFrom a lendors perspective, Mondavi appears very noticeable in its ability to repay long-term debt and interest despite having a debt to asset ratio 35% be disordered the industry average. Mondavi has a very low probability of bankruptcy with or without the market cap being considered. Accordingly, Mondavi would be a good candidate for a general line of credit from lendors.INVESTORS Mondavis stock appears to be over valued by approximately 100% compared to 1997 and 1998s per share market value. According to the EPS ratio, such over valuation appears to be consistent from 97 to 98, according to the EPS ratio. Therefore, it seems that investors would be hesitant to purchase Mondavis stock.