Wine Companies Survey

Continuous Assesment
 Teamwork Assessment
I give you some Financial Statements regarding 3
burgundian wine companies
You have to send me a Powerpoint by the 14th of
November
Your group will have to do an oral presentation to me
begnining of December based on the PowerPoint you
prepared
I attach an example of an Excel Table to help you to show
calculated figures
This assessment represents 20% of the global finance exam
You can add some additional analyses such as a SWOT…
Teamwork Assessment : oral
presentations dates

-C01 : 02/12/2022 - 8 AM to 12 AM

-C02 : 02/12/2022 - 1 PM to 5 PM

-C03 : 05/12/2022 - 1 PM to 5 PM
 Topic
Compare with a full analysis these 3 companies
by using Financial Statements and infos.
- Define Business Model by using « Infos »
- Calculate Cycles
- Calculate Profitability Ratios
- Calculate Risk Ratios
- Compare Financial Statements and ratios
levels
- Explain differences by making a link with the
Business Model
- Make Recommendations
 Accounting Balance Sheet Profitability Ratios

Assets Liabilities ROE

ROE check
Current Current
Cash Payables RONA
Receivables Short Term Debt NPM
Inventory NATO
RONA check
Fixed Long Term Debt
Tangible FL
Intangible Owner's Equity i
D/E
Total Total

Risk Ratios
Financial Balance Sheet
Liquidity
Assets Liabilities
Current ratio
Current Current Quick Ratio
Cash Gearing
Net Working Capital Short Term Debt Debt Exposure

Fixed Long Term Debt Solvency

Tangible
Intangible Owner's Equity Solvency ratio
Interest Ratio
Total Total

Net Income Statement

Cycles
Sales
Cost of Goods Sold Inventory Period
Gross Profit Receivables Period
Variable Costs
Economic Added Value Operating Cycles
Fixed Costs
EBITDA Payables Period
Depreciation
EBIT Cash Cycle
Interest
EBT
Taxes
Net Income
 MP Company
Accounting Balance Sheet (k€)
Assets Liabilities
Current 37,700 Current 31,200
Cash 300 Payables 28,000
Receivables 14,500 Short Term debt 3,200
Inventory 22,900
Fixed 7,600
Long Term Debt 2,100
Tangible 2,000
Intangible 5,600
Shareholder Equ. 12,000
Total
45,300
 MP Company
Income Statement (k€)
Sales 41,200
COGS 27,100
Gross Profit 14,100
Variable Costs 7,600
Economic Added Value 6,500
Fixed Costs 4,300
EBITDA 2,200
Depreciation 600
EBIT 1,600
Interest 130
EBT 1,470
Taxes500
 LL Company
Accounting Balance Sheet (k€)
Assets Liabilities
Current Assets : 66,900 Current Liabilities : 52,200

Cash 2.500 Accounts payable 22.200

Receivables 8.400 Short Term Debt 30.000
Inventory 56.000

Fixed Assets : 9,300 Long Term Debt 8.500

Tangible assets 8.300 Owner’s Equity 15.500

Intangible Assets 1.000
 LL Company
Income Statement (k€)
Sales 41,700
COGS 22,400
Gross Profit 19,300
Variable Costs 5,500
Economic Added Value 13,800
Fixed Costs 8,300
EBITDA 5,500
Depreciation 1,900
EBIT 3,600
Interest 2,400
• EBT 1,200
Taxes400
Net Income 800
 LJ Company
Accounting Balance Sheet (k€)
Assets Liabilities
Current Assets : 76,000 Current Liabilities :27,000

Cash 400 Accounts payable 17,000

Receivables 17,600 Short Term Debt 10,000
Inventory 58,000

Fixed Assets : 6,000 Long Term Debt 2,000

Tangible assets 5,000 Owner’s Equity 53,000
Intangible Assets 1,000
 LJ Company
Income Statement (k€)

Sales 56,000
COGS 26,700
Gross Profit 29,300
Variable Costs 9,500
Economic Added Value 19,800
Fixed Costs 4,800
EBITDA 15,000
Depreciation 1,000
EBIT 14,000
Interest 500
EBT 13,500
Taxes 4,500
Net Income 9,000
 Companies Info

1) History, Shareholders

MP: established since 1950; 100% family control

LL: established since 1800; 100% family control
LJ: established since 1840, taken over in 1980; 100% subsidiary of US group

2) Business Type

MP: “Negociant” with small vineyard, partially consolidated in the Company

LL: “Negociant” with important vineyard, slightly consolidated in the
Company
LJ: “Negociant” with important vineyard, highly consolidated in the Company

3) Products Type

MP: full wines offer from “Vin de Table” to the top; multi brands
LL: large wines offer from “Vin de Pays” to the top; unique brand
LJ: large wines offer but only AOC; unique brand

4) Distribution, customers, domestic/export

MP: all customers including Supermarkets chain with sub-brand; export 35%,
mainly Benelux, Germany, Asia
LL: Traditional distribution (Importers, Agents); Restaurants, retailers; export
85% mainly USA (35% turnover sales), UK (15%), Japan
LJ: Traditional distribution; Restaurants, retailers; export 80% mainly USA for
50% turnover sales, UK (10%)
 Ratios Formula

Cycles
Calculations based on Accounting Statements

Operating Cycle = Inventory Period + Receivables Period

Inventory Period = 365/Inventory Turnover
Inventory Turnover = Total Costs/Inventory
Receivables Period = 365/Receivables Turnover
Receivable Turnover = Sales/Receivables
Cash Cycle = Operating Cycles – Payables Period
Payables Period = 365/Payables Turnover
Payables Turnover = Total Costs/Payables

Profitability Ratio
Calculations based on Financial Statements

Return on Equity: ROE = EBT/Equity (+ retained earnings)

Note: ROE = RONA + FL

Return on Net Assets: RONA = EBIT/EA

Note: RONA = NPM x NATO
NPM = EBIT/Sales
Net Assets Turn Over = Sales/EA

Financial Leverage: FL = (RONA-i) x (D/E)

i = Interest Paid/Financial Debt (Long Term + Short Term)
D = Financial Debt (Long Term + Short Term)
E = Equity (+retained earnings)

Risk Ratio
Calculations based on Accounting Statements

Liquidity Ratio:

Current Ratio: Current Assets/Current Liabilities

Quick or Acid Ratio: (Current Assets-Inventory)/ Current Liabilities
Gearing: Long Term financial Debt / Equity (+ retained earnings)
Debt Exposure: (Financial Debt (Long Term + Short Term)–Cash) / Equity (+
retained earnings)

Solvency:

Solvency Ratio: Equity (+retained earnings)/total liabilities

Interest Ratio: Interest / Ebitda