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Molson Coors Brewing Company Financial Ratios

669 Words3 Pages

This paper will analyze the financials of two businesses in the in the consumer staples segment, more specifically the alcoholic beverage industry. The alcoholic beverage industry consists of beer, wine, and distilled spirits. Within each category there are many different distributors. Some of these companies are small and only serve a small region. While others have a diverse product line and serve their product not only nationally but globally. Molson Coors Brewing Co. is the second largest beer distributor and has just over 30% market Share. Castle Brands, Inc. is one of the smallest in the industry that is publicly traded. The financials of both companies will be compared to the industry benchmark to determine their current financial condition. …show more content…

is the seventh largest beer brewer by volume in the world and has over 20 brands of beer. Castle Brands Inc. produces premium and super premium rum, vodka, whiskey, wine, beer, and liqueurs. These two businesses are very different in size, type, and financial stability. Before analyzing the financial it is important to note that the industry benchmark was not available for the current ratio, accounts payable turnover, as well as the debt to equity ratio. The current ratio shows the companies ability to pay short-term debt; it compares amount of assets to liabilities. Molson Coors Brewing has a current ratio of .68, this indicated that the company has more current liability than assets. This may appear to be a red flag, but we notice that Molson Coors has a turnover rate of 9.76, this is almost double the industry benchmark. In this case it is very possible that the current ratio is low because inventory is turning over very quickly, before accounts payable becomes due. Castle Brand has a current ratio of 3.91. This is more than double the industry benchmark. However, inventory turnover is very low; this indicates the company might not be using assets wisely. By excluding the inventory we are able to calculate the quick ratio. We notice even without the inventory Castle Brands is dramatically exceeding the benchmark of .22 at 1.52. This shows the company is in a very good liquidity

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