Boston Beer Essay examples

17868 WordsFeb 28, 201372 Pages
Boston Beer Equity Valuation Valuation Date: April 1, 2005 Jason Boney Jordan Gristy Preston Madden Heath Stanley Boston Beer Co. Equity Valuation Table of Contents Executive Summary Business and Industry Analysis Competitive Advantages Five Forces Model Industry Competitive Analysis Accounting Analysis Key Accounting Policies Degree of Accounting Flexibility Evaluation of Accounting Strategy Accounting Quality of Disclosure Red Flags Quantitative Analysis Ratio Analysis Liquidity Profitability Capital Structure Forecasting Balance Sheet Income Statement Statement of Cash Flows Forecast Summary Valuation Analysis Method of Comparables…show more content…
5 Light Beer Introduction and Expansion- Boston Beer has just unveiled their newest product of Samuel Adams Light to the better beer market. In 2004, the light Samuel Adams out sold the original for the first time in the company’s history. We believe that this will be the key to Boston Beer’s success to maintain its hold in the better beer industry and bring in new demand for Boston Beer. Financial Stability Boston Beer’s financials are impressive as compared to the big names in the beer industry. One of the more impressive areas is the lack of debt and the ability to leverage the company to new heights. In 2000, Boston Beer had no actual long term debt on the books and since has brought on very little. This is mainly due to the strategy of contracting to other brewers to maintain low risk for the well being of the company. The profitability, capital structure, and liquidity for Boston Beer all appear to be stronger than the averages in the alcoholic industry which shows the strong stability of the firm. Boston Beer’s Altman Z-score is at 3.49 which is considered safe and good investment grade quality. In conclusion, Boston Beer has many choices on where to take the company in the 21st Century. With overall high quality in its financial structure, Boston Beer has the ability to one day grow and become a dominant force within the beer industry as a whole. Valuation Models such as the free cash flow, long-run residual income, and abnormal earnings growth showed

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