We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Calaveras Case Essay Sample

  • Pages: 2
  • Word count: 432
  • Rewriting Possibility: 99% (excellent)
  • Category: investments

Get Full Essay

Get access to this section to get all help you need with your essay and educational issues.

Get Access

Introduction of TOPIC

We believe that Calaveras is a good investement according to the following ratios: * Gross Margin ratio
Gross margin/cost of sales = 2,534,255 – 1779809 = 1,42
This tells about the increasing operational activity of Calaveras and at the same time a decrease inliability. This signals management commitment for stable investments and improvement of the financial health of the company. * ROA ratio

Income/Assets = 0,42
In regard to ROA investment, which measure the efficiency of the investment, the return of investment. the sales forecast is based onincrease in demand and a successful marketing strategy that will lead to increase in case sales andprices due to the orientation towards high quality wines. Therefore, we expect that these assumptions will not deviate extensively and according to it we can conclude that Calaveras will be able to repay the debt. In case of any larger deviations towards decrease of case sales followedby increased c

ompetition in the market or unsuccessful marketing strategy in terms of high-quality wines, it might

Sorry, but full essay samples are available only for registered users

Choose a Membership Plan
happen that the goals of achieving required levels of sale would not bemet. This would have a negative impact on the ability to repay the debt.

As Calaveras Vineyards are limited by the supply chain, it should focus on the improvements of production and increased contractual securities in order to guarantee supplies. Moreover, theincrease in the wine market is a great opportunity for Calaveras to strengthen their marketposition especially in the wholesale market, where the company has secure brand position andstable relationships with the distributors. This brings us to the conclusion that Calaveras has bigopportunities to expand its market share. Another advantage Calaveras is its ability to be presentin both the markets of premium wines as well as in the private-label wines for hotels, resorts, andairlines, and in servicing the higher-volume wine

* Debt ratio

Total Debt/Total assets = 0,013

based on all this we can say that Calaveras is a company worth investing in andaccording to the conditions proposed by Goldengate the company is able to repay the debt.However, Goldengate may consider increasing the interest rate up to 12 %, and at the same timeincreasing the frequency of paying the interests up to 4 times a year. This alternative is supportedby the Debt-Service-Coverage-Ratio, where 1.2 is the lowest admissible level. (Figure 10)Anyway, increasing the interest rate represents the worst-scenario case that will hedge Goldengateagainst deviations from above stated assumptions. Nevertheless, our final remark on the proposalis that Goldengate should participate in the offered deal accepting the given condition

We can write a custom essay on

Calaveras Case Essay Sample ...
According to Your Specific Requirements.

Order an essay

You May Also Find These Documents Helpful

The Environment for Foreign Direct Investment (FDI)

The environment for foreign direct investment (FDI) has become very competitive and it is important for countries to critically examine their investment policies and ensure their relevance and effectiveness in attracting and benefiting from FDI. Foreign direct investment (FDI) has the potential to generate employment, raise productivity, transfer skills and technology, enhance exports and contribute to the long-term economic development of the world�s developing countries. More than ever, countries at all levels of development seek to leverage FDI for development, including Malaysia. Malaysia has made the transition from being an essentially primary commodity producing economy over the last three decades to one in which manufacturing contributes more than 30 per cent of annual GDP and the overwhelming majority of exports. This transformation has been facilitated by an export-led investment strategy, in which FDI from more developed nations has played a key role. To accelerate its economic transition, Malaysia has launched...

Why Foreign Direct Investment Does Not Enter...

FDI can be described as international capital flows in which a firm in one country creates or expands a subsidiary in another. Its basic function is to provide capital to developing countries that face capital inadequacy due to and consequent of structural problems in the finance of economic development. Today, an increasing number of countries are using FDI and showing tremendous effort to attract FDI to their country. In 1982, FDI inflows and outflows were 57 and 37 billion USD at present value, which remain very small compared to 2000 inflows and outflows of 1271 and 1150 billion USD, respectively. Asia and the Pacific region, in which Turkey is included, have a share of 11.3 %, corresponding to 143.8 billion USD. As seen, there is a general attitude to use more and more FDI. Turkey, in this context, is by no means an exception. This can be proven by the...

Impact of FIIs on Investment Portfolio

This paper aims to shed light on the behaviour of individual investors when foreign investments inject in the economy. The focus is to study the role of foreign institutional investors in changing the investment decisions of the individual investors and their contribution to economic growth through Capital accumulation in the economy , scope of the study is limited to India. Individual investor we mean by the small investor who invests in capital market, money market, real estate ,gold, bonds, Banks, post office instruments .Individual investment decisions are affected by many factors such as risk tolerance ,type of investor , knowledge of the product ,geographical, demographic factors, economic conditions and most importantly returns of the investment. Individual investors are highly motivated by the higher returns with optimum level of risk .FIIs play active and major role in the volatility of the stock market . Trading by FIIs happens on a continuous...

Popular Essays


Emma Taylor


Hi there!
Would you like to get such a paper?
How about getting a customized one?