McPhee Distillers Harvard Case Solution & Analysis

McPhee Distillers Case Study Solution

Total Asset Turnover is the calculation, which is responsible for computing the Sales turnover on Average total Assets for the year. In the year 2015, the company is effective in using its assets to generate profits for the investors;whereas, in the year 2016; the company has less sales generating ability against the total assets.

COGS Margin depicts that company’s cost of goods sold is 69% of its sales in the year 2015; while, in the year 2016, cost of goods sold is 84% of its sales, which is clearly higher than the previous year.

Gross Margin Ratio is calculated to analyze the company’s margin of gross profit in its sale revenue. In the first year of business, the calculations show that company is generating 31% gross profits from its sales revenue. While, in the next year; the gross profit got half of the first year due to lower production as well as the lower demand of the products in the whisky market.

Conclusion

All in All, MCPHEE financial analysis is showing low performance and position of business after just two years of its establishment,which is quite alarming for all the stakeholders of the company. It can affect the company in numerous ways, such as: investors might become reluctant from investing in the risky business....................................

 

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