South Delaware Coors

1264 WordsJun 23, 20116 Pages
Recommendation Based on our analysis of the South Delaware Coors Wholesale Distributorship opportunity, we recommend proceeding with the application process for the following reasons: 1. The expansion of Coors Inc. into southern Delaware fills a market void that is normally supplied by the fourth largest brewery in the United States. 2. The break-even analysis which indicates a considerable positive difference between the figures required to reach the break-even point for the South Delaware Coors Wholesale Distributorship and the figures possible based on the predicted percentage of market shares for Coors Inc. nationally. 3. The sensitivity analysis illustrates that investment in the South Delaware Coors Wholesale Distributorship…show more content…
o Loan and Interest Payment to Bank based on remainder needed to cover costs and ensure an adequate supply of cash on hand which was calculated from the Average Percentage of Cash for $240,000 worth of inventory from Study F. • Variable Costs Avg. Wholesale Price $3.16 Avg. WSP / gal $3.16*1.77 $5.59 Bottles and Cans Costs $5.59 * .771 $4.31 Kegs .45 * $5.59 = $2.52 Costs $2.52 * .771 $1.94 o Avg. Wholesale Price of a six-pack from Study I o Avg. WSP / gal based on conversion of six-pack to gallon (1.77) o COGS from Study F = 77.1% o Kegs = .45 Bottles & Cans • Average Profits Bottles and Cans Profits $5.59 - $4.31 $1.28 Kegs Profits $2.52 - $1.94 $0.58 Ratio B&C to Kegs 3 : 1 Avg. Profit (3* 1.28 + 1* 0.58) / 4 $1.105 Expected % Profit 2.2% Avg. Profit w E%P 1.105 - .022 $1.083 o Ratio of 3 Bottles and Cans to 1 Keg o Expected Profit Percentage from Study F • Break-Even Analysis (based on 12% interest rate) Break-Even Point $336,729.73 / $1.105 303,808.11 gal BE w E%P $336,729.73 / $1.083 311,001.53 gal % Market Share 303,808.11 / 5,100,000 5.98% % MS w E%P

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