in is just below the industry standard and profit margin is higher than the industry standard. Beringer is doing an adequate job of controlling costs. Asset turnover is much lower than the industry standard. The company has a poor return on common shareholder’s equity(6.86%). The industry standard is 10.89%. THE ROBERT MONDAVI CORPORATIONDESCRIPTION OF BUSINESSThe Robert Mondavi Corp. produces premium table wines under the following labels: Robert Mondavi Napa Valley, Robert Mondavi, Woodbridge, Vichon Mediterranean, La Famiglia di Robert Mondavi, Byron, Opus One, Luce and Caliterra. The company operates five wineries in California, including on co-managed with the owners of Chateau Mouton-Rothschild.MANAGEMENT PERFORMANCEManagement is doing an excellent job of using the company’s assets to generate income at 25% above the industry average, however, this does come at a price resulting in a 28% below average asset turnover. The company is good at marking up their product and excellent at controlling costs, thus allowing profit margins to be 70% over the industry average. Finally, it appears that Mondavi’s management is doing a good job of using debt to benefit its shareholders but is strictly average concerning how much net income is available to the common shareholders and leveraging debt.SHORT-TERM VENDORSDue to the nature of the business, over 40% of Mondavi’s total assets is inventory which is the reason for a negative operating cash flow of (18,470). Mondavi doesn’t seem to do very well in using its customers and vendors for financing activities. It seems that a vendor would be very hesitant to do business with Mondavi due to all of these issues as well as the fact that the company’s operating cycle is very lengthy. Although, assuming most payables are due net 30, Mondavi appears to pay their bills on an average of 3.8 days early. LONG-TERM LENDORSFrom a lendor’s perspective, ...
