Building Competitive Advantage: Sam Adams's Beer Industry
Russ Arnold
Ben Berman
Thomas Huettner
Building Competitive Advantage 7102
Dr. Jim Senese
June 5, 2012
Industry/Company Overview
Industry’s Dominant Features Jim Koch began selling Sam Adams beer from bar to bar out of a brief case in April 1985. He sold unlabeled bottles kept cold with chill packs from his briefcase. His sales tactic was the following simply 10-second pitch: “Try this new beer. It’s handcrafted in small batches. You’ll like the taste.” (Hyatt, 2010) At the time, the craft beer industry in America was virtually non-existent. By 1989, sales of Sam Adams had grown to 63,000 barrels. In 1996, Sam Adams sales had reached 1.2 million barrels. (Wikipedia, 2012). The success of the brand served as the catalyst for what …show more content…
The company’s quick ratio is 1.37, after taking out inventories. This still leaves plenty of room for the company to repay its short-term obligations. The last liquidity ratio is the cash ratio, which is the least commonly used of the three measures mentioned previously. The cash ratio is the ultimate ratio of liquidity because it only compares cash and marketable securities to current liabilities. An extremely high cash ratio could signify that a firm is stockpiling cash and not investing its assets wisely. The company’s cash ratio of 0.74 is less than 1.0 but still reasonable considering the other amounts of short-term assets. While the company does not have the ability to pay its short-term obligations with cash, it is still operating within a secure level of …show more content…
The difference is the debt to equity ratio divides the total debt by stockholders equity. This ratio shows how a company finances its activities, whether through debt or equity. The Boston Beer Company’s debt to equity ratio of 0.47 indicates it has very little debt compared to its equity. This shows how the company has been conservative in using debt to finance its operations. The last leverage ratio is interest coverage, a tool used to see how easily a company can pay its interest expenses. Since the company has interest income instead of interest expense, the interest coverage ratio is not valuable when evaluating the company’s 2011
Ben Berman
Thomas Huettner
Building Competitive Advantage 7102
Dr. Jim Senese
June 5, 2012
Industry/Company Overview
Industry’s Dominant Features Jim Koch began selling Sam Adams beer from bar to bar out of a brief case in April 1985. He sold unlabeled bottles kept cold with chill packs from his briefcase. His sales tactic was the following simply 10-second pitch: “Try this new beer. It’s handcrafted in small batches. You’ll like the taste.” (Hyatt, 2010) At the time, the craft beer industry in America was virtually non-existent. By 1989, sales of Sam Adams had grown to 63,000 barrels. In 1996, Sam Adams sales had reached 1.2 million barrels. (Wikipedia, 2012). The success of the brand served as the catalyst for what …show more content…
The company’s quick ratio is 1.37, after taking out inventories. This still leaves plenty of room for the company to repay its short-term obligations. The last liquidity ratio is the cash ratio, which is the least commonly used of the three measures mentioned previously. The cash ratio is the ultimate ratio of liquidity because it only compares cash and marketable securities to current liabilities. An extremely high cash ratio could signify that a firm is stockpiling cash and not investing its assets wisely. The company’s cash ratio of 0.74 is less than 1.0 but still reasonable considering the other amounts of short-term assets. While the company does not have the ability to pay its short-term obligations with cash, it is still operating within a secure level of …show more content…
The difference is the debt to equity ratio divides the total debt by stockholders equity. This ratio shows how a company finances its activities, whether through debt or equity. The Boston Beer Company’s debt to equity ratio of 0.47 indicates it has very little debt compared to its equity. This shows how the company has been conservative in using debt to finance its operations. The last leverage ratio is interest coverage, a tool used to see how easily a company can pay its interest expenses. Since the company has interest income instead of interest expense, the interest coverage ratio is not valuable when evaluating the company’s 2011