A history and analysis of the financial statement of the Boston Beer Company.
Written in 2002; 2,195 words; 11 sources; MLA; $ 68.95
Paper Summary:
This paper is an analysis of the Boston Beer Company and shows how by examination of its financial statement that the company has been able to sustain costs instead of increasing profit. This enables it to raise the profit margins otherwise not possible.
From the Paper:
"The company maintains a 10 percent operating margins, 4 to 5 percent growth margin and 14 percent on return on capital. It also mandates half of the capital be cash. The company holds a strong stand among industry leaders but there are some pitfalls to its operation. The year 2001 proved a mixture of growth and decline for Boston Beer. Readers must note the industry has become stagnant over the last 2 years [Crouch, 2001]. The valuation of the growth rate has decreased each year. Boston Beer too has decreased in profit rate due to the decline in demand. The plus points that could be awarded to Boston Beer are its brand Samuel Adams and distribution network. For this reason the company is able to sustain its operations for quite a long time with constant injection of investment. However, investment is limited for outsiders because the company members hold most of the stock. For example Koch holds about 4.1 million B shares in the company. Outsiders like Miller Beer have tried to buy out the company through agency stock but have been unsuccessful in its attempt [Marcial, 1999]. This shows the resistant characteristics of the company against outside aggressive competitors."
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