Boston Beer Company Financial Analysis
Subject: Boston Beer Company Financial AnalysisNYSE: SAMOverview: From the latest annual report (or 10-K) and proxy statement answer the questionsbelow. Many firms now have files from their websites or you can alwaysdownload them from the SEC site at http://www.sec.gov. If you go to the SECwebsite use EDGAR. Read that and get the basics and you can then locate thevarious financial documents that the firm files with the SEC â for example, thecompanyâs proxy statement will typically be listed as form DEF 14A. DO NOTATTEMPT TO USE THE ABBREVIATED STATEMENTS AVAILABLE ONSOURCES LIKE YAHOO. These sources create a generic format and mean thatvaluable firm specific information is often lost.Go to http://www.yahoo.com and then to finance. Enter the firm and find theinformation such as the firm beta value, stock chart, price-to-earnings ratio, etc.You can use this site for some other financial information (but it is not a sourcefor the firmâs financial statements! See note above.). Review Questions:1. Examine firmâs working capital management.a. Calculate the Inventory conversion period, Receivables collection period, andPayables deferral period.b. Calculate the cash conversion cycle (Use formula below)Cash Conversion Cycle = Inventory Conversion period + Average Collection Period âPayables deferral period c. Calculate Net Operating Working Capital (Use formula below)NOWC = operating current assets â operating current liabilitiesd. Would you describe the firmâs working capital policy as relaxed, moderate orrestricted? Comment on any needed areas of improvement in working capitalmanagement (or note any specific areas of strength).e. What is the firmâs cash balance as a percentage of total assets? f. e. Discuss the firmâs level of cash. Is it appropriate given the industry in whichyour firm operates?
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