Essay Wine Industry Financial Analysis
DESCRIPTION OF BUSINESS
Canandaigua Brands, Inc. (formerly Canandaigua Wine Company, Inc.) is a producer and supplier of wine and an importer and producer of beer and distilled spirits in the United States. It maintains a portfolio of over 130 national and regional brands of beverage alcohol which are distributed by over 850 wholesalers throughout the United States and selected international markets. Its beverage alcohol brands are marketed in three general categories: wine, beer and distilled spirits. Brands include: Paul Masson, Manischewitz, Monte Alban, Almaden, Barton’s Gin and Corona Beer.
Management performance is good.
Canandaigua’s return on assets is better than the …show more content…
Long-term liquidity is good.
Very few assets are required to service debt. Canandaigua’s debt to asset ratio is much lower(.33) than the industry standard(.63). This seems to be the case with the other two companies within this analysis. The company needs to continue to increase net income and reduce debt to improve its interest coverage ratio. Altman’s Z shows that there is a low probability of bankruptcy for Canandaigua.
This stock is a buy.
Canandaigua’s earnings per share is good in comparison to the other two companies in this analysis. EPS has improved from last year. The company has an adequate price to earnings ratio, but it is not as good as Beringer’s.
BERINGER WINE ESTATES HOLDINGS, INC.