Strategic Financial Analysis - Diageo Whiskey Company

Diageo Whiskey Company Analysis Introduction Diageo holds a title of being the globe’s largest producer of whisky, connected to some 29 distilleries and warehouses storing seven million casks of maturing spirits. Their products are sold in more than 180 countries and the company holds offices in 80 countries. Diageo’s best-selling brand (Johnnie Walker) has been sold in the fiscal year of 2011 in an astonishing amount of 17.8 million â€Å"nine-liter cases†, which were mainly traded overseas. The demand for whisky globally is rising since the 1990s at that time the market was deemed â€Å"flat†, while according to the Scotch whisky association exports of scotch were valued at  £3 billion in the first nine months of the year 2011, which is a†¦show more content†¦From this point Diageo’s growth was much sounder and fueled up by positive quarter results lead by encouraging forecast figures. As a result, Diageo’s stock grew by more than 80 percent within a three year span, beating FTSE 100 Index’s performance (approximately 33 percent) by an impressive 47 percent. Q3. Determine the current value of the equity in this company, using each of the following methods: 1) Net Asset Value (NAV). Net asset value is used by financial analysts as a complementing tool to define the value of a company’s stock. Net Asset Value is basically tells the current balance sheet value of assets after deducting liabilities (Carmichael et al., 2003). To calculate NPV of Diageo we have to look for data in the most recent financial statements, published on â€Å"Investor Relations† page on the company’s website. The total value of Diageo’s assets is reported to be 19,777,000,000 GBP. Total Liabilities and Debt of Diageo was 14,532,000,000 GBP (all data as of July 31, 2010). Net Asset Value = Total Assets – Total Liabilities = 19,777,000,000 – 14,532,000,000 = 5,245,000,000 GBP Net Asset Value per share = NAV/ Number of shares outstanding = 5,245,000,000 GBP/249,000,000 shares = 21.06 As we see, the number is very small and doe s not reflect the current value of the company’s stock. The NAV value is not only far from the current stock value, but it also can’t be considered as a fair value. The inconvenience lies in the fact thatShow MoreRelatedStrategic Financial Analysis - Diageo Whiskey Company2497 Words   |  10 PagesDiageo Whiskey Company Analysis Introduction Diageo holds a title of being the globe’s largest producer of whisky, connected to some 29 distilleries and warehouses storing seven million casks of maturing spirits. Their products are sold in more than 180 countries and the company holds offices in 80 countries. Diageo’s best-selling brand (Johnnie Walker) has been sold in the fiscal year of 2011 in an astonishing amount of 17.8 million â€Å"nine-liter cases†, which were mainly traded overseas. The demandRead MoreEssay on The Brown-Forman Corporation1386 Words   |  6 PagesThe Brown-Forman Corporation is one of America’s largest producers and distributors of spirits and wines; selling to state governments, retailers, and wholesalers. Founded in 1870 in Louisville, Kentucky by George Garvin Brown, the company provides comprehensive industry services that span the expanse of manufacturing, marketing, bottling, importing and exporting, and sales of alcoholic beverages. The majority of their brands are globally recognized such as Jack Daniels, Southern Comfort, FinlandiaRead MoreDOW CHEMICALS6171 Words   |  25 Pages9 - 2 0 1- 0 3 3 REV. 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