The Australian Wine Industry

2715 Words May 2nd, 2006 11 Pages
CONTENT

Title Page

Introduction – Background & Issues 1 - 2

Financial Analysis 3 – 8

Summary of Financials 9 - 13

Significant key opportunities and risks for the company 14 - 15 and investors in McGuigan

Other financial and non-financial factors that impact upon 16
McGuigan 's performance and attractiveness as an investment opportunity Limitations of the analysis & implications of these limitations for 17 - 18 any investment decision

Appendix A: References 19

Background & Issues

The Mcguigan interest in the Australian Wine Industry goes back four generations. Owner Patrick McGuigan the first of four generations to enter the wine industry was a dairy farmer by trade.

Percy
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2.41:1

Quick ratio

2005 ($ '000) 2004 ($ '000) 2003 ($ '000)

12728+361288+
120698
124905

= 494714
124905

= 3.96:1 2654+332641+
126534
135304

= 461829
135304

= 3.41:1
773+270452+
125028
105775

= 396253
105775

= 3.74:1

Current Cash Debt Coverage Ratio

2005 ($ '000) 2004 ($ '000) 2003 ($ '000)

2523
124905+135304/2

= 2523
130104.50

= 0.019 times 5768
135304+105775/2

= 5768
120539.50

= 0.047 times (10040)
105775+119523/2

= (10040)
112649

= (0.089) times

Receivables turnover ratio

2005 ($ '000) 2004 ($ '000) 2003 ($ '000)

320422+47628
120698+ 126534/2

= 368050
123616

= 2.97 times 262025+43683
126534+125028/2

= 305708
125781

= 2.43 times
248381+35069
125028 +87486/2

= 283450
106257

= 2.66 times

Average collection period in days

2005 ($ '000) 2004 ($ '000) 2003 ($ '000)

365
2.97
= 123 days 365
2.43
= 150 days
365
2.66
= 137 days

Inventory turnover

2005 ($ '000) 2004 ($ '000) 2003 ($ '000)

(276939)
60018+51176/2

= (276939)
55597

= 4.98 times
(216777)
51176+32271/2

= (216777)
41723.5

= 5.19 times
(209354)
32271+15817/2

= (209354)
24044

= 8.70 times

Average Days in Inventory

2005 ($ '000) 2004 ($ '000) 2003 ($ '000)

365
4.98

= 73.29 days 365
5.19

= 70.32 days
365
8.70

= 41.95 days

Solvency Ratios

Debt to total assets ratio

2005 ($ '000) 2004 ($ '000) 2003 ($ '000)

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