Matthew Schreck
Management 511: Financial Decision Making
Boston Beer Company
April 18, 2013
Amelia Drobile
Boston Beer Company
History and Financial Position
Boston Beer Company (SAM) is a brewery in Massachusetts most commonly known for its Samuel Adams line of “craft” beers. The Samuel Adams line of beer was introduced in 1985. Since then the company has grown to do over 580 million dollars in revenue each year. 580 million is a very small piece of the food and beverage industry but the amount of shareholder wealth they are providing is impressive. Boston Beer Company has been named one of the top publically traded businesses to watch in 2013 by Forbes.
Boston Beer Company is actually part of two
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Quick Ratio (MRQ)
The quick ratio for Boston Beer Company is 1.33. A company’s quick ratio is an indicator of a company’s short-term liquidity. This ratio is a more conservative form of the current ratio because it does not take into account inventory of the company when determining its current assets. Boston Beer Company still has a favorable ratio well above 1.0. While their current ratio is much better with all the inventory, Boston Beer Company is still a reliable company that can pay off its short term debts if need be.
Measuring Returns
Primary Stakeholders Boston Beer Company has five primary stakeholders within company, Martin F. Roper (President and CEO), C. James Koch (Founder and Chairman), William F. Urich (CFO and Treasurer), John C. Geist (Vice President of Sales), and Thomas W. Lance (Vice President of Operations). Of the five of them C. James Koch holds more than 34% of the shares and is the sole holder of the class B common stock that gives him the right to appoint five of the eight members that are chosen to be on the board as seen in the following quote from the 2013 Proxy Statement. “At the Annual Meeting you will be asked to elect three Class A Directors and cast an advisory vote on executive compensation. As the sole holder of Class B Common Stock, I will elect five Class B Directors and cast a vote to ratify the selection of our independent registered public accounting firm.” (Boston Beer Company, Inc., 2013)
While Koch may have
Quick ratio is another measure of liquidity. In quick ratio we consider only liquid assets and its standard ratio is 1:1. Quick ratio of Peyton Approved is 7.63. Thus, there is no doubt that the company has got excellent liquidity. Company has enough liquid assets to pay off current liabilities.
Boston Beer Company Mission statement is to “seek long-term profitable growth by offering the highest quality product to the U.S. beer drinker”
The quick ratio denotes that the company's ability should satisfy the short-term obligations. In brief, how many times can the firm respond its current liabilities by using current assets without the final stock? As many times it can cover its obligations, as better for the company.
Draw an REA diagram with cardinalities and tables with primary keys, foreign keys, and non-key attributes for the following business:
The Boston Beer Company, Inc., founded in 1984, is a leading brewer in United States, offering wide variety of high quality full-flavored, handcraftedbeers. It is distinctive due to the time-honored recipe of brewing and authentic, consistent quality of alcoholic beverages. Samuel Adams Boston Lager is the pride of BBC, regular handcrafted beer “stands for quality, inner self-worth, authenticity, and unique New England or Yankee toughness” ( Martin Roper, Chief Operating Officer). Unfortunately, the company experienced the failure of conquering light beer segment
Address the following questions in a 4-5 page write-up of the Boston Beer Company Case to explore the issue of Initial Public Offerings.
Samuel Adams is a well-known character in our history books, but his name is also shared a well-known beer. While Samuel Adams the man was born in Boston, Massachusetts in 1722, Samuel Adams the beer was created in 1985 in the same city (Frankel, Samuel Adams and the American Revolution) (Boston Brewing Company, Samueladams.com). What prompted the naming a beer after a historical figure? The founder of Samuel Adams Boston Lager, Jim Koch, said that he “chose the name because Samuel Adams was a Boston firebrand, a revolutionary thinker who fought for independency” (Boston Brewing Company, Samueladams.com). What made Samuel Adams so revolutionary?
Because Samuel Adams prides themselves on being a top notch craft beer producer, a lot rides on their reputation. Boston Beer and Samuel Adams have a strong reputation that rivals even the biggest of beer producers.
This ratio is similar to current ratio, except that it excludes inventory from current assets. Inventory is subtracted because it is considered to be less liquid than other current assets, that is, it cannot be easily used to pay for the company’s current liabilities. A company having a quick ratio of at least 1.0, is considered to be financially stable. It has sufficient liquid assets and hence, it will be able to pay back its debts easily (Qasim Saleem et al., 2011).
Current overall strategy. Over the years the Boston Beer Company focused on producing it products as they have in the past by using a time honored traditions of four-vessel brewing process. They use nothing but the best ingredient that they can buy. Brewing the best quality beer remains their focus. The recipe remains the same as when the company started producing its flagship brand, Samuel Adams Boston lager in the 1800s. They still produce beverages that are full flavored, complex, and consistent quality their customer’s desire. They currently focus on promoting the Samuel Adams product line more so than the other brands. They create and offer a variety of traditional and innovative beers and ciders through many product lines. Samuel Adams offers over 30 distinctive styles of beers. Boston Beer Company’s products are considered to be in the Better Beer category. Being in the Better Beer category means it is standard for the products to be more pricy, better quality, and have a better image and taste than other domestic beers. The company is primarily centralized in the United States where approximately ninety six percent of its products are sold. Samuel Adams is considered to be one of the largest brands in the Better Beer category. The Boston Beer Company sells its products to independent beer distributors who then supply the beer to retailers (The Boston Beer Company, Inc., 2014).
The American craft beer industry wasn’t always as robust as it is today. America used to have a reputation around the world for brewing only fizzy tasteless beer in extremely large brewing operations. In 1984, when Jim Koch found his great-great grandfather’s beer recipe, he decided to start the Boston Beer Company and produce his beer under the name Samuel Adams. In 1984 there were only about 100 breweries in the United States, but today there are over 4,000 and Jim Koch is credited with pioneering the American craft beer industry.
The Adolph Coors Case Study proved the dedication and self-reliance Coors brings to the beer industry. Having overcome great adversity by surviving the prohibition years, Coors durability and sustainability are also complimentary points on the structure of the company. Coors is a family owned company that had humble beginnings in Colorado and within 100 years grew into a multimillion-dollar company. Coors’ controlled manufacturing process is a sign of their individuality in the beer industry, this was not an unknown fact, however, as they were receiving orders to ship Coors beer all across the nation as of 1972. The case study allowed an internal and external point of view, which was highly beneficial to properly analyze their upcoming problem within the company.
Boston Beer company, Inc. Founded In 1984 produces and sells alcoholic beverages primarily In the United States. There most well-known beer is Samuel Adams Boston Lager. The company sells approximately 60 beers under the Samuel Adams and the Sam Adams brands. 20 of which are hard ciders, 13 flavored malts that are under the Twisted Tea Brands, 4 hard seltzers as well, 40 beers under the A&S Brewing trade name. its market and sells it products to a network of approximately 350 wholesalers. Who then sell retail. You can find Boston beer labeled products in pubs, grocery stores, restaurants and more.
| This ratio measures a company’s ability to meet its short-term obligations with its most liquid assets, which is why inventory is omitted.
nutrient rich alternative then having to drink from near by canals or rivers. Beer was