Calaveras
The purpose of this analysis is to determine if Goldengate Capital should participate in a $4.5 million management acquisition of Calaveras Vineyards.
Located in Alameda Valley, California, Calaveras Vineyards sits on 220 acres, consisting of 175 acres of vineyards, and 45 acres of equipment sheds, a winery building, and a small farmhouse with guestrooms, offices, and sales room.
Strategic Analysis
SWOT Analysis
Financial Analysis
Current management of Calaveras, Stout PLC, prepared pro forma financial statements for fiscal years ending 1990, 1991, 1992, and 1993. This information is being used to examine historical data and look for relevant patterns in order to further valuate Calaveras Vineyards.
Sales increased from $2.4 million in 1990 to $2.8 million in 1991. In 1992 Calaveras started to produce premium wines with increasing average industry prices. Although sales decreased from 1992 to 1993, cash flow improved immensely. Increasing the average price, and introducing premium wines, allowed Calaveras to gain a higher profit margin.
Based on the pro forma historical financial statements, a comparative analysis has been completed to identify Calaveras’ position among other manufacturers of wine and brandy.
Calaveras, when compared to other manufacturers industry-wide, may have not have the capability to pay its obligations. The current ratio of 0.4 is less than 1.0, indicating that Calaveras does not have enough current assets to cover their liabilities, to include equity. Although the current ratio is low, this does not mean there is a critical problem. Management should be aware and address quickly to determine what action to take. The assets to sales ratio indicates that Calaveras somewhat efficient in managing its assets in the relation the revenue generated. The higher the number the less investment is needed in order to generate revenue. Calaveras falls somewhere in between the upper and median quartile. They
Located in Alameda Valley, California, Calaveras Vineyards sits on 220 acres, consisting of 175 acres of vineyards, and 45 acres of equipment sheds, a winery building, and a small farmhouse with guestrooms, offices, and sales room.
Strategic Analysis
SWOT Analysis
Financial Analysis
Current management of Calaveras, Stout PLC, prepared pro forma financial statements for fiscal years ending 1990, 1991, 1992, and 1993. This information is being used to examine historical data and look for relevant patterns in order to further valuate Calaveras Vineyards.
Sales increased from $2.4 million in 1990 to $2.8 million in 1991. In 1992 Calaveras started to produce premium wines with increasing average industry prices. Although sales decreased from 1992 to 1993, cash flow improved immensely. Increasing the average price, and introducing premium wines, allowed Calaveras to gain a higher profit margin.
Based on the pro forma historical financial statements, a comparative analysis has been completed to identify Calaveras’ position among other manufacturers of wine and brandy.
Calaveras, when compared to other manufacturers industry-wide, may have not have the capability to pay its obligations. The current ratio of 0.4 is less than 1.0, indicating that Calaveras does not have enough current assets to cover their liabilities, to include equity. Although the current ratio is low, this does not mean there is a critical problem. Management should be aware and address quickly to determine what action to take. The assets to sales ratio indicates that Calaveras somewhat efficient in managing its assets in the relation the revenue generated. The higher the number the less investment is needed in order to generate revenue. Calaveras falls somewhere in between the upper and median quartile. They