Case Study Report

Sleeman Brewery Limited

As Investment Portfolio Option

Executive Summary

I am writing this report for Chantal Dumont as to give recommendation whether or not she should invest in Sleeman Brewery Limited. We then recommend you to invest in this company if you are seeking for long term growth in your portfolio.

Introduction

This report is made by Ryan Tan to for Chantal Dumont as part of the assessment to determine and to help her to come to a decision whether to include or exclude Sleeman Breweries Limited in her portfolio. The report itself will look deeper into the case and the explanation behind the case to provide Ms. Dumont with the sufficient …show more content…

Though their COGS is higher in 1999 than in 1998 but the net sales for 1999 is also high. This amount might be because they increased the price or because they can minimize the cost of production. The ratio in 1999 in worse than ratio in 1998

Return on Equity

Return on Equity in year 1999 is 12.3% which is 10% higher than the industry’s ROE which is 2.1%. The reason might be because their profit is bigger to their equity compare to the industry’s average profit. Compare to 1998, the 1999 ratio is lower and worse than its previous year.

There are 2 poorest ratio result which are days inventory and days account payable

Days inventory

Days inventory for 1999 is 108 days higher by 30 days from the industry’s days of inventory. This means that they get their product out from their inventory longer than the average company in the industry. Compare to 1998 when the score is 125 days, the 1999 ratio is better.

Days account payable

The company has 122 days payable, on the other hand the industry only score 61 days. This means that it takes longer for the company to pay their supplier compare to the industry. They might not have the money due to higher days account receivables. The 1999 days account payable ratio is better than the previous year which is 182 days to pay off debts.

Fixed assets

Fixed assets from the vertical analysis have decreased from 1997 to 1999. It has gone down from 53.32% in 1997, 43.29% in 1998 to 30.88% in 1999. It