The Farm Winery Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

The Farm Winery Case Study Help

Executive Summary

Farm Winery is a well-known business that operates for the last 30 years. It is located in Napa Valley. The main expertise of Farm Winery is to produce award-winning wines. The product line of the organization is (Pinot Noir, Chardonnay, and Cabernet Sauvignon). Farm Winery is known for its good taste and quality in the market. In the year 2013, the founder of the organization looks to prepare the current and long-term financing goals.

At the current time, the farm feels to develop a plan for the fiscal year 2014 that help the business to achieve its self-sustainability, additional financing, and new vineyard development decision goals. The team will need to develop strategies to increase revenue and manage costs to achieve these goals.

Issue or Problem

At the current time, Jim Madsen wants to prepare a plan for the fiscal year 2014 and also wants to look over the current financials of the farm. Farm Winery looks for various goals that help the business to grow, which include self-sustainability and securing additional capital expenditure. Now the farm looks over the decision of whether to invest in additional vineyard development or not. These are the primary issues that organizations face at the current time that has to reduce to get sustainability in the highly competitive wine industry.

Now look over the other problems that directly impact the operations and business practices in which it presents outdated equipment used by the farm for production. This type of equipment ultimately down the speed of production and create trouble for the organization to increase its market or product demand. In previous time organization put an eye on this issue by providing solutions through minor equipment modifications but this type of advancement consider to be a failure to resolve the issue.

Solution

To reduce the current issues faced by the Farm Winery there is a complete solution is presented that includes various factors, which is upgrading the production equipment and process by implementing new technologies which ultimately helps the business to get high efficiency in operations. There are various elements and factors includes that help to provide a clear understanding of the current financials of the farm and long-term plans for future years. The solution includes the following key elements that help to get a clear indication of the business's current and future conditions, which includes current financial ratios, cash budget analysis of the year 2014, and pro forma forecast from the year 2014 to 2018.

Looking over the goal of the current finances of the business presentation that the gross margin ratio of the farm is good but it’s considered to be low as compared to the prior year. In the year 2011, the net profit margin of the farm presents a highly negative value but after 2 years in 2013, the net profit margin becomes positive, which means that at the current time farm generates good profit and there is the projection that its net income grows in future years.

The quick ratio and current ratio from the current financial present that the farm have sufficient liquidity assets in the year 2012 to pay its liabilities. The debt ratio of the farm considers being very low compared to its assets ratio in all three years, which means that the farm has low debt on business and it can take finances for new technologies.

After analyzing the current financial and future forecasting it presents that there is a need to increase the production capacity of wines that help the farm to get self-sustainability in business. The second solution is to invest more in equipment upgradation that helps the farm to increase the volume of production, which ultimately help in increasing revenues. There is a need to expand distribution channels because the market is highly competitive and exploring new market by using distribution channels help to increase sales.

For additional capital, expenditure farm needs more financing and the debt ratio of the organization presents that the farm can take debts because its debt ratio is very low compared to the equity ratio but the forecasting of financial statements of the farm winery presents that business generates good growth in revenues and net income that help the business to get financing for capital expenditure. The decision of investing in additional vineyard development is considered to be appropriate because the forecasting of business presentations that the farm generates good revenue in the future helps the business to get finances for additional development.................
The Farm Winery Case Study Help