Sleeman Breweries

1322 Words Oct 20th, 2012 6 Pages
Case Study Report

Sleeman Brewery Limited

As Investment Portfolio Option

Executive Summary

I am writing this report for Chantal Dumont as to give recommendation whether or not she should invest in Sleeman Brewery Limited. We then recommend you to invest in this company if you are seeking for long term growth in your portfolio.

Introduction

This report is made by Ryan Tan to for Chantal Dumont as part of the assessment to determine and to help her to come to a decision whether to include or exclude Sleeman Breweries Limited in her portfolio. The report itself will look deeper into the case and the explanation behind the case to provide Ms. Dumont with the sufficient
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The calculation shows that they have twice the number which is 122 days compare to the industry which has only 61 days to pay their supplier. One of the reasons might be because they do not have the money due to higher days account receivables which indicates on how long to take for the customer to pay them. The 1999 days account payable ratio is better than the previous year which is 182 days although in the 1999 calculation, I cannot find the data for 2010 beginning account payable balance.

The result also shows problem in their inventory turnover which scores lower and resulting in their product being out in the market slower than the typical brewery companies in the same industry. Although it is rare for beers to get spoiled, there is still chance for beer if they don’t store it correctly. The lower inventory turnover can also indicate inefficiency in producing them. Thus, if they keep producing without planning carefully on increasing their inventory turnover, they will incur more cost to store their beers and less money and liquidity.

Analysis

Through the analysis of the Financial statement has concluded several ideas on how the company works, the finding of two superior ratios compare to the industry are gross profit margin and return on equity. This will be discussed further on the next paragraph.

Gross

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