Keurig Green Mountain was founded in 1981 as best coffee and coffeemaker company in the United States of America, initially named as green mountain coffee roasters. It specializes in making best beverages imaginable at homes and workplaces. The company contributes a prominent market share in the coffee industry. The paper highlights the financial department of Keurig Green Mountain and focuses on the assets, liabilities, annual income statements, inventories, stocks, and other financial related concepts. The income statement of Keurig Green Mountain indicates that company is performing well for past few years. The revenues generated by the company are the reason behind the investments being done by the stockholders. Keurig Green Mountain has firm belief on understanding the business impact on sustainability and its impact on business. The company's financials are strong since the company is effortlessly working towards creating better coffee than competitors in the coffee industry. The annual report of Keurig Green Mountain has explained that Keurig maintains working capital by building inventories of brewers and accessories during the fourth quarter of fiscal year. The financials of companies are managed professionally.
The cash manages the funding of inventories flows from the operations and to some extent borrowings from existing credit facilities. The current and noncurrent liabilities of the company along with current and noncurrent assets are explained in the balance sheets of the company which is maintained every month. The annual report also draws attention towards the reasons for having an impact on the business financials such as unavailability of high-quality Arabica coffee or high costs of Arabica coffee. Another major concern that could affect the financials of business is a failure to meet the desired financial performance (Can Akdeniz, 2016). There is certain other reason which could impact the financial results of Keurig Green Mountain such as increase/decrease in income rates and exposure to foreign currency risk .
The company’s debt to equity ratio was 5.29% in 2014 that means that the company focuses more on equity finance than on debt financing. The company’s working capital also show huge positive value in 2014 which represents high working capital, quick ratio, and current ratio’s for 2014. The company is able to utilize its assets in an efficient manner since, the ratio for 2014 shows a higher value compared to 2013. The other important financial highlights include the amount of equity that has increased from 2013 to 2014 (i.e. $2,635,570 to $3,458,681). The company is able to attract more investors and the increase in investor’s trust results in the increase of total equity. The total assets of the firm also increased from 2013 to 2014 and the value is $4,797,307. The company purchased new equipment to support their production and other essential operations to lift their performance in the long run.
The Keurig Green Mountain pays cash dividends to the holders of common stock on a quarterly basis, whereas the declaration and payment of future cash dividends depend on the board of directors and heavily depend on factors such as operating performance, financial condition, capital expenditure requirements, and other measures. The equity ratios indicate the cash dividend declared per share of the common stock for the particular period. The ratios determine the high and low closing prices. Financial strength is determined by a quick ratio, current ratio, LT Debt/Equity, and Total Debt/Equity. The poor operational efficiency of Keurig Green Mountain led to the adverse impact on the financials of the company. The stocks are declining as a result of a decrease in brewer sales, eroding single-serve market share and dull launches of new products. The financial ratios showed a drastic reduction which ended up as the negative impact on the business. The net sales, total assets, total stockholders’ equity, and cash dividends declared per common share are the factors determining the comparability of financial data (Forbes, 2015).
It is opinionated that to curb the financial issues created last year, and Keurig Green Mountain management needs to work on the strategies revising the operating efficiency of the company. The financial data of the company such as assets and liabilities are in dire need of professional handling. The company needs to evaluate the performance of operating segments based on net sales to external customers and operating income. It is concluded that the proper consideration of financial data and other financial concepts of Keurig Green Mountain can pull the Keurig Green Mountain out of its misery.
References
Can Akdeniz . (2016). Growth Engines: Case Studies and Analysis of Today's Fastest Growing Companies. New York: Can Akdeniz.
(2014). Fiscal 2014 Annual Report. Waterbury: Keurig Green Mountain. Retrieved 2016
Forbes. (2015). Keurig Green Mountain: Can A Positive Guidance Pull The Company Out Of Its Misery? Retrieved from http://www.forbes.com/sites/greatspeculations/2015/11/17/keurig-green-mountain-can-a-positive-guidance-pull-the-company-out-of-its-misery/#488429c77c74
Appendix
Ratio Analysis
