Brown-Forman Corporation is a liquor distribution company founded in 1870 in Louisville, Kentucky. It markets top brands like Jack Daniel's, Canadian Mist, and Woodford Reserve. Brown-Forman has a market risk of 21.30% according to its 2016 10-K filing, making it a highly volatile industry. From 2014-2016, Brown-Forman paid out $744 million in dividends while retaining $10.3 billion in earnings, with plowback ratios ranging from 64.7% to 75.7%.
In this presentation we talked about React.js on the Devstaff meetup (www.devstaff.gr) on November 10, 2016 at FORTH (Foundation for Research and Technology-Hellas), Heraklion, Crete.
Speakers:
Bastakis Stavros: https://gr.linkedin.com/in/bastakis
Kampitakis Nikos: https://gr.linkedin.com/in/kabitakis
Vourlakis Nikolas: https://gr.linkedin.com/in/nikolas-vourlakis
About the event: https://goo.gl/Lps3zW
In this presentation we talked about React.js on the Devstaff meetup (www.devstaff.gr) on November 10, 2016 at FORTH (Foundation for Research and Technology-Hellas), Heraklion, Crete.
Speakers:
Bastakis Stavros: https://gr.linkedin.com/in/bastakis
Kampitakis Nikos: https://gr.linkedin.com/in/kabitakis
Vourlakis Nikolas: https://gr.linkedin.com/in/nikolas-vourlakis
About the event: https://goo.gl/Lps3zW
This is an example of an investment memo for a consumer products company, Kraft Heinz. This does not constitute investment advice and is an outdated valuation. This should only serve educational purposes.
Core Value and Mission Statements for Central City Brewery (Surrey.docxvanesaburnand
Core Value and Mission Statements for Central City Brewery (Surrey)
According to the research about Central City Brewery and the whole beer industrial in Vancouver, BC, and we can know that the number of public and private breweries are increasing every year. For now there are about 51 (1) craft brewers in Metro Vancouver to meet the demand of the beer lover. In this extreme competition environment, Central City Brewery decide to invest (2) 35 million dollar on opening a public Bridgeview site and a public beer tasting tour for their own factory in Surrey. Central City Brewery also sign a contract with Simon Fraser University and they decide to open a new course in Simon Fraser University Surrey campus which call the Science of Brewing. This course will express the chemistry, biology and microbiology involved in the brewing process, and the relatives of the students which take this course also can join the classes and learn the brewing science by doing it. Red racer beer is the core product of Central City Brewery, and they make these beer into many different flavored, for example, the red racer winter ale is a spicy taste beer and red racer white ale is an orange taste beer(3). Central City Brewery also works hard on inviting some different new products beside beer, such as Gin and vodka. Therefore, the core value and mission statement of Central City Brewery are to promote the craft brewing industry in Vancouver, BC by means of education, promotion of special events and to research and develop different alcoholic beverages to meet the demand of the market.
Corporation Goals for Central City Brewery (Surrey)
1. Raise awareness in the market – promotion, education of special events to the costumer, and advertising
The nowadays brewery industrial for Vancouver BC is a perfect competitive market, and Central City Brewery should let the costumers in the market know the advantage about their company. The investment on the factory tour and sign with SFU for opening new course for brewing are the good start for marketing. They can also do the following to make their brand more famous:
· Lower the ticket price for people which want to visit their factory
· Sign contract with Vancouver local TV station for doing the advertising on television
2. Research and develop different alcoholic beverages for attract more customers in the market
Central City Brewery was opened at 2003, and only focus on making different flavored beer during these 14 years till now, and in this year January they just distill their first single malt whisky and vodka(4). They decide to produce both wine and beer in the future operation. According to the research, the number of Canadian people drink wine now is about two time than the number in 1900, therefore, it is a good time to join the wine market to marker more profits. They may make low-alcohol wine to let the beer lovers also can enjoy it.
3. Production- Improve the working efficiency by hiring, training and investment .
Flower One Holdings - Investor Presentation - April 2020SharePitch
Flower One is the largest cannabis cultivator, producer, and full-service brand fulfillment partner in the state of Nevada. The Company's common shares are traded on the Canadian Securities Exchange under the Company's symbol "FONE", in the United States on the OTCQX Best Market under the symbol "FLOOF" and on the Frankfurt Stock Exchange under the symbol "F11". For more information, visit: https://flowerone.com.
Updated investor presentation for Flower One Holdings. The Company’s common shares are traded on the Canadian Securities Exchange under the Company’s symbol "FONE", in the United States on the OTCQX Best Market under the symbol "FLOOF" and on the Frankfurt Stock Exchange under the symbol “F11”. For more information, visit: https://flowerone.com.
This is an example of an investment memo for a consumer products company, Kraft Heinz. This does not constitute investment advice and is an outdated valuation. This should only serve educational purposes.
Core Value and Mission Statements for Central City Brewery (Surrey.docxvanesaburnand
Core Value and Mission Statements for Central City Brewery (Surrey)
According to the research about Central City Brewery and the whole beer industrial in Vancouver, BC, and we can know that the number of public and private breweries are increasing every year. For now there are about 51 (1) craft brewers in Metro Vancouver to meet the demand of the beer lover. In this extreme competition environment, Central City Brewery decide to invest (2) 35 million dollar on opening a public Bridgeview site and a public beer tasting tour for their own factory in Surrey. Central City Brewery also sign a contract with Simon Fraser University and they decide to open a new course in Simon Fraser University Surrey campus which call the Science of Brewing. This course will express the chemistry, biology and microbiology involved in the brewing process, and the relatives of the students which take this course also can join the classes and learn the brewing science by doing it. Red racer beer is the core product of Central City Brewery, and they make these beer into many different flavored, for example, the red racer winter ale is a spicy taste beer and red racer white ale is an orange taste beer(3). Central City Brewery also works hard on inviting some different new products beside beer, such as Gin and vodka. Therefore, the core value and mission statement of Central City Brewery are to promote the craft brewing industry in Vancouver, BC by means of education, promotion of special events and to research and develop different alcoholic beverages to meet the demand of the market.
Corporation Goals for Central City Brewery (Surrey)
1. Raise awareness in the market – promotion, education of special events to the costumer, and advertising
The nowadays brewery industrial for Vancouver BC is a perfect competitive market, and Central City Brewery should let the costumers in the market know the advantage about their company. The investment on the factory tour and sign with SFU for opening new course for brewing are the good start for marketing. They can also do the following to make their brand more famous:
· Lower the ticket price for people which want to visit their factory
· Sign contract with Vancouver local TV station for doing the advertising on television
2. Research and develop different alcoholic beverages for attract more customers in the market
Central City Brewery was opened at 2003, and only focus on making different flavored beer during these 14 years till now, and in this year January they just distill their first single malt whisky and vodka(4). They decide to produce both wine and beer in the future operation. According to the research, the number of Canadian people drink wine now is about two time than the number in 1900, therefore, it is a good time to join the wine market to marker more profits. They may make low-alcohol wine to let the beer lovers also can enjoy it.
3. Production- Improve the working efficiency by hiring, training and investment .
Flower One Holdings - Investor Presentation - April 2020SharePitch
Flower One is the largest cannabis cultivator, producer, and full-service brand fulfillment partner in the state of Nevada. The Company's common shares are traded on the Canadian Securities Exchange under the Company's symbol "FONE", in the United States on the OTCQX Best Market under the symbol "FLOOF" and on the Frankfurt Stock Exchange under the symbol "F11". For more information, visit: https://flowerone.com.
Updated investor presentation for Flower One Holdings. The Company’s common shares are traded on the Canadian Securities Exchange under the Company’s symbol "FONE", in the United States on the OTCQX Best Market under the symbol "FLOOF" and on the Frankfurt Stock Exchange under the symbol “F11”. For more information, visit: https://flowerone.com.
1. Brown Forman Financial Profile
Sean Vickers, Garrett Gibbins, Brandon Fleischmann, Josh Mercado
Professor Van Horn
December 1st, 2016
I have acted with honesty and integrity in producing this work and am unaware of anyone who
has not
2. Vickers, Gibbins, Fleischman, Mercado 2
Part 1
Company Overview
The Brown-Forman Corporation is one of the most successful liquor distribution companies in
all of the United States. This corporation is based in Louisville, Kentucky, and has a rich history
in providing some of the top name-brand liquors.1
Brown-Forman markets some of the top
consumer beverage alcohol brands around including Jack Daniel’s, Early Times, Old Forester,
Canadian Mist, Woodford Reserve, and GlenDronach.2
This corporation not only distributes
whiskeys, but also many other wines and spirits. In the year 1870, The Brown-Forman
Corporation was founded by George Garvin Brown. He was from Louisville, Kentucky and was
engaged in the profession of a pharmaceutical salesman.3
Brown was one of the first in his time
to be intrigued by selling top-shelf alcohol in fine glass bottles, an idea that gained Brown-
Forman imminent prominence.4
Although this corporation primarily resides in the United States,
it has done business with Chilean wine producers, and has even acquired Mexican brand Tequila
Herradura in 2007.5
It should be noted that Brown-Forman was included in Newsweek magazine as one of the most
environmentally friendly corporations in all of America. Brown-Forman was ranked 63rd out of
500 large corporations across America, and was ranked 3rd overall in the liquor industry.6
By not
only focusing on short term profits in manufacturing alcohol, but by also insisting in the ideal
image of being environmentally friendly, the long run societal image of Brown-Forman lives on.
Distributors should understand the importance of taking care of the environment by keeping all
facilities and equipment up-to-date, and by being conscious of what they do on a day-to-day
basis. Brown Forman exemplifies excellence in every category of the alcoholic beverage
industry.
1
https://www.brown-forman.com/about/history/ 1
2
https://www.brown-forman.com/about/history/ 1
3
https://www.brown-forman.com/about/history/ 1
4
https://www.brown-forman.com/about/history/ 1
5
https://www.brown-forman.com/about/history/ 1
6
https://www.brown-forman.com/about/history/ 1
3. Vickers, Gibbins, Fleischman, Mercado 3
Part 2
Risk and Return
The market risk that we calculated from the 10-k for 2016 was 21.30%. This risk is extremely
high, and it is an indication of just how volatile the liquor industry is. It should be noted that the
geopolitical environments vary across the world, and no one country is ever the same in the way
that they conduct business.7
Although the recession of 2008 impacted the United States
negatively, it also had a major impact on the world as a whole.8
According to the Brown-Forman
2016 Annual Report, this recession led to “low consumer confidence, high unemployment,
budget deficits, burdensome governmental debt, austerity measures, increased taxes, and weak
financial, credit, and housing markets.”9
This recession also led individuals across the world to
drink more conservatively at home, rather than going out to restaurants and bars to drink — this
led Brown-Forman to suffer directly as a result.10
In addition, there is always the potential for
encountering unstable governments abroad, as there is always some form of corruption in
emerging nations. Possible forms of corruption may include “expropriation, nationalization,
confiscation of assets, problems with repatriation of foreign earnings, economic or trade
sanctions, closure of markets to imports, anti-American sentiment, terrorism, health pandemics,
and a significant reduction in global travel.”11
In addition to these risks, changes in consumer
preferences and the speed at which Brown-Forman can adapt to these changes in preferences
would also adversely impact them.12
Domestically, regulations and laws vary per state. For
instance, in Louisiana, one can buy liquor 24/7. In Texas, all liquor stores close at 9:00 pm and
are not open on Sundays. Also in South Carolina, the state owns all liquor stores, which leads to
corporations like Brown-Forman to lose some of control in product promotions. It should also be
noted that relative to many other liquor distributors, Brown-Forman is a domestic firm, and is
very small. Smaller firms always experience more of a risk than larger firms.
7
https://www.brown-forman.com/investors/annual-report/
8
https://www.brown-forman.com/investors/annual-report/
9
https://www.brown-forman.com/investors/annual-report/
10
https://www.brown-forman.com/investors/annual-report/
11
https://www.brown-forman.com/investors/annual-report/
12
https://www.brown-forman.com/investors/annual-report/
5. Vickers, Gibbins, Fleischman, Mercado 5
8 year: (Beta coefficient is .6881)
Published Beta is .7399 - the difference of the published Beta and our calculated Betas
could simply be a rounding condition as excel rounds to many numbers. There is not much
of a difference between the 3 year and 8 year Betas, compared to the published Beta,
however, the calculated Beta for 5 year was substantially lower. Generally, lower Betas
mean less risk, so for 5 year there was less risk involved. For 3 and 8 year, the Betas were
closely related, so it could just be a rounding error.
=.0158+.7399(.118-.0158)
=9.14%
6. Vickers, Gibbins, Fleischman, Mercado 6
Part 3
Dividends and Earnings
Brown-Forman returns cash to shareholders in two ways: Stock repurchases and dividends. The
firm was authorized to buy back up to $250 million worth of their outstanding Class A and Class
B common shares from the fiscal year of October 15th
, 2014, through October 14th
, 2015. On
March 25th
, 2015, a $1 billion increase to their share repurchase authorization was approved to
be completed by March 14th
, 2016. On January 28th
, 2016, a new $1 billion increase was
approved commencing April 1, 2016 through March 31st
, 2017. When the current fiscal year
ends on April 30th
, 2017, the company will have repurchased up to $2,250,000,000 worth of
Class A and Class B common shares over the past three years. Brown-Forman hands out
dividends every quarter, at least in the last two fiscal years. From the records available to our
team, the firm has also paid out dividends consistently on a year-to-year basis. The company has
not spun off any assets.
Year Net Income ($)
2008 440 M
2009 435 M
2010 449 M
2011 572 M
2012 513 M
2013 591 M
2014 659 M
2015 684 M
2016 1,067 M
Total Income 5.41 B
After taxes and expenses, Brown-Forman accumulated about $5,410,000,000 from 2008-2016.
Over the past three years (2014-2016) Brown-Forman accumulated $2,410,000,000.
It must be noted that Brown-Forman offers two classes of common stock, Class A and Class B.
While these two stocks have varying share prices, they have the same dividend payout per share.
The only difference between these two stocks is that owners of Class A shares have voting rights
while the owners of Class B shares do not. For this reason, the shares will be lumped together
7. Vickers, Gibbins, Fleischman, Mercado 7
throughout the following calculations. The dividend payout data over the same period is as
follows:
2014 2015 2016
Shares Outstanding 213,455,000 208,700,000 197,742,000
Multiplied by x x x
Dividend payout per share
($)
1.09 1.21 1.31
Total $ paid out in dividends 232,665,950 252,527,000 259,042,020
The total amount of money paid out as dividends from 2014-2016 is $744,234,970.
We figured out the total possible return Brown-Forman could have returned to its shareholders,
with a 0% plowback, in the past three years by adding the retained earnings and the dividends
paid each year.
2014 2015 2016
Retained Earnings ($) 2,894,000,000 3,300,000,000 4,065,000,000
Total $ paid out as dividends 232,665,950 252,527,000 259,042,020
Total possible return ($) 3,126,665,950 3,552,527,000 4,324,042,020
Therefore, Brown-Forman could have returned $11,003,234,970 to its shareholders over the past
three years. Instead they only returned a little over $744 million.
We calculated the plowback ratio for each year by first calculating the dividend payout ratio and
then subtracting from 1.
Dividend payout ratio = $ paid out as dividends/net income (year)
2014 - $232,665,950/$659,000,000 = .35305 = 35.3%, 1-.35305 = .6469 = 64.7% plowback
2015 - $252,527,000/$684,000,000 = .36919 = 36.9%, 1-.36919 = .6308 = 63.1% plowback
2016 - $259,042,020/$1,067,000,000 = .24277 = 24.3%, 1-.24277 = .7572 = 75.7 plowback
This data suggests a sizeable decrease in dividend payout for shareholders from 2015 to 2016.
8. Vickers, Gibbins, Fleischman, Mercado 8
Dividend growth rate
Year Dividend ($) % change (y1/y0-1)*100
2007 .62
2008 .69 11.29%
2009 .75 8.69%
2010 .78 4%
2011 1.49 91.03%
2012 .89 -10.27%
2013 4.98 459.55%
2014 1.09 -78.11%
2015 1.21 11.01%
2016 1.31 8.26%
Total percent increase = 505.45%
505.45/ (Number of years – 1) = average percent increase
505.45/9 = 56.16%
The average dividend growth rate is 56.16%
In the year 2013, Brown-Forman paid out $4.98 per share in dividends. Compared to the
previous year's’ dividend payout of $0.89, this was a 459.55% increase. This year is considered
an outlier and to get a more accurate dividend growth rate over this time period, our team
removed this year and recalculated.
Total percent increase = 45.9 %
45.9/9 = 5.1%
The average growth rate (excluding 2013) is 5.1%
9. Vickers, Gibbins, Fleischman, Mercado 9
Earnings per share growth rate
Year EPS($) % change (y1/y0-1)*100
2007 1.72
2008 1.89 9.88%
2009 1.91 1.06%
2010 2.01 5.24%
2011 2.60 29.35%
2012 2.37 -8.85%
2013 2.75 16.03%
2014 3.06 11.27%
2015 3.21 4.90%
2016 5.22 62.62%
Total percent increase in EPS = 131.5%
131.5 / (Number of years -1) = average percent increase
131.5/9 = 14.61%
The average EPS growth rate over the last 10 years is 14.61%
In the fiscal year of 2016, Brown-Forman has a growth rate of 62.62%. This increase resulted
from a few factors including the sale of Southern Comfort as well as Tuaca (two of BF’s brands),
which accounted for $1.76 of the increase. There was also a reduction in the shares outstanding
resulting from the ongoing share repurchases. Lastly, there was a decrease in the effective tax
rate. Professional estimates of the growth rate were unavailable to our team because they were
not published online. The 63% growth rate in 2016 is considered an outlier due to the sale of two
of Brown-Forman’s brands, as well as continued stock repurchases. With this being said, we
believe that a professional estimate of the growth rate would be significantly lower than that of
our calculated average of 14.61%. A lower growth rate would also be expected because our data
went back 10 years opposed to 5 years of most professional estimates. Stock repurchases are also
coming to a close, and there is no report of Brown-Forman selling any more of their brands.
10. Vickers, Gibbins, Fleischman, Mercado 10
Part 4
Valuation of the Firm
Brown-Forman Corporation’s current quoted stock price for its B stock is at $46.38. For 2016,
dividends paid out for the year were $1.31, and they had a 10-year dividend average growth rate
of 5.1%. Since this firm has been around since the late 1800’s, the firm’s growth should be at a
constant rate with exception to any key events drive might drive growth up or down. With the
necessary values factored in, the current calculated price was at $32.41. Operating cash flow for
Brown-Forman was also at $1,123,000,000, up from $735,000,000 the prior year and resulting in
a 52.79% growth in OCF.
When compared to the stock price posted at the time, there was a $13.94 difference. This stock’s
intrinsic value could suggest an interest in the stock and create the difference in prices by
overvaluation.13
Applying the dividend discount model to the actual stock price gives a growth
rate of 6.32%, differing from the 5.1% that was calculated. One possible reasoning could be from
the the dividend anomaly in 2013. $4.98 was paid out, up from $.98 the year prior. That resulted
in a 459.55% increase in dividend growth.
Brown-Forman is already undertaking measures that would help increase the shareholders’
wealth through the stock repurchase currently in the works. Within the next few months, Brown-
Forman will complete the 1 billion-dollar increase in the stock repurchase. They also still payout
dividends, also working towards increasing market value.
13
http://www.investopedia.com/ask/answers/011215/what-difference-between-intrinsic-value-and-current-
market-value.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
11. Vickers, Gibbins, Fleischman, Mercado 11
Part 5
Capital Structure Choices
Brown-Forman’s capital structure is currently divided between 49% of debt and 51% of equity.
Total value of the capital structure for 2016 is $3,063,000,000. The weighted average of the cost
of capital for Brown-Forman was calculated to 10.51%. When compared to the company’s return
on invested capital, which was 28.69%, the higher ROIC indicates that Brown-Forman is
effectively creating value from its capital structure.
Within the alcoholic beverage industry, Brown-Forman does appear to have slightly more risk
with a higher weighted average of the cost of capital over two other competing alcoholic brand
holders. Molson-Coors and the Boston Beer Company were selected because they both are
publicly traded, American-based corporations. All three have portfolios of brands within the
alcoholic beverage industry, though it should be noted that Brown-Forman has the largest and
most diverse without actually being a producer of any specific one. Molson-Coors had a
weighted average of the cost of capital of 8.96%, and the Boston Beer Company had theirs at
8.32%. Those two companies directly compete with each other over beer sales, and could explain
the similar weighted average of the cost of capital. Though, the Boston Beer Company is almost
completely financed through equity, with debt making up less than one percent. Brown-Forman
is a much larger firm than both and carries products that may not always compete in sales with
the other two examples.
12. Vickers, Gibbins, Fleischman, Mercado 12
Part 6
Financial Ratios
Brown-Forman has a strong gross profit margin with a return of .76 cents on every dollar in sales
and a net income of .26 cents on each dollar. The profitability of Brown-Forman is strong
amongst its competitors in the alcoholic beverage industry and exhibits, on average, a gross
profit margin of .3-.4 cents on every dollar and an average net profit margin of .10-.15 cents on
every dollar in sales. Brown-Forman also has .9601 cents in debt for every dollar of equity held
by shareholders. Compared to its competitors, Brown-Forman is in the middle of the road, with
Crimson Wine group having a debt to equity ratio of .26 and New Age Beverage Corp. having a
ratio of 2.63.
Based on the 2016 annual report calculations, Brown-Forman exhibits a P/E ratio of 15.79,
meaning investors can expect to earn a dollar on every $15.79 invested, which runs on average
with their competition. Brown-Forman also has a working capital ratio of $2.82 in currents assets
in which it can cover each dollar of debt with. With a debt-to- assets ratio of .36, Brown-Forman
has a dollar in total assets for every .36 cents in total debt, Brown-Forman exhibits an excellent
interest coverage ratio in which it can cover 33.33 time its interest payment. In parallel, Brown-
Forman displays a liquid financial standing with a quick ratio of 1.47 where it has $1.47 in assets
for every dollar in liabilities.
As shown below, other financial ratios for Brown-Forman are listed below with their respective
quantities. Based on information found from CSImarket.com, Brown-Forman respectively ranks
in the top 3 in all categories in comparison to their competition in the alcoholic beverage
industry. Based upon these ratios, it's clear that Brown-Forman is in good financial standing and
appeals to their shareholders who have high expectations from one of the top alcohol companies
in the world, respectively.
Liquidity Ratios
Current Ratio = $2,223,000,000.00 2.8104
$791,000,000.00
Quick Ratio = (2223000000 - 1054000000) 1.4779
$791,000,000.00
13. Vickers, Gibbins, Fleischman, Mercado 13
Leverage Ratios
Debt to Assets Ratio = $1,501,000,000.00 0.3588
$4,183,000,000.00
Debt to Equity Ratio = $1,501,000,000.00 0.9609
$1,562,000,000.00
Fixed Charge Coverage= 1489000000 + 46000000 33.3696
$46,000,000.00
Activity Ratios
Inventory Turnover = $4,011,000,000.00 3.8055
$1,054,000,000.00
Total Asset Turnover = $4,011,000,000.00 0.9589
$4,183,000,000.00
Accounts Receivable Turnover = $4,011,000,000.00 7.1753
$559,000,000.00
Profitability Ratios
Gross Profit Margin = $306,600,000.00 0.7644
$4,011,000,000.00
Net Profit Margin = $1,067,000,000.00 0.2660
$4,011,000,000.00
Return on Total Assets = $1,067,000,000.00 0.2551
$4,183,000,000.00
Return on Equity = $1,067,000,000.00 0.6831
$1,562,000,000.00
14. Vickers, Gibbins, Fleischman, Mercado 14
Part 7
Conclusion
Based upon our financial profile, Brown-Forman is an exceptional company that boasts a strong
financial portfolio within its respective industry. This company has a long-standing reputation
for rewarding shareholders. This conclusion can be derived from Brown-Forman’s consistent
growth of dividend payouts to their shareholders and averaging a growth rate of 5.1% over the
past 10 years (excluding 2013, in which there was 459% increase in dividend per share). Brown-
Forman has also paid a dividend to shareholders for 70 years, and has raised its dividend each
year for the past 32 years. With consistent earnings and returns to shareholders, Brown-Forman’s
financial profile exhibits strong consideration to be a part of any investment portfolio, especially
one centered around diversification due to constant need in the marketplace for alcoholic
beverages.
Based on our calculations it can be said that Brown-Forman, there was some differences in the
stock value that was mentioned previously. Those differences might be linked to unusual
dividend activity in 2013. Dividend growth calculations were substantially off when factoring in
that year. Our calculations omitted the payout on 2013.
Any major changes to help increase shareholders’ wealth should be considered only after the
completion of the $1 billion increase in stocks repurchased. They should also continue their
dividend payout at 25%. Though they have recently sold two major brands, they should look into
pursuing new, growing brands as well.
Final thoughts on Brown-Forman focuses on why they offer two different stocks (A & B). Stock
A has voting rights attached to it, while stock B does not. Both of these stocks have different
share prices. Due to the fact that the stocks are separated, the professional estimates are not as
accurate to our data because we lumped both types of stock together for the purpose of our
project. This made it difficult to compare published information with our personal calculations.
In 2015 Brown-Forman generated $684 million in net income, while in 2016 they generated
$1.067 billion. This illustrates that Brown-Forman has recently experienced a large spike in
profitability over the past year. Due to the recent success of Brown-Forman, we expect a leveling
out of future profits over the next few years. Brown-Forman has made tremendous contributions
to the African American, LGBT, and inner-city communities, thus propelling them to securing a
good reputation in the eyes of the public. In addition, Brown-Forman is also environmentally
friendly. All of these elements are paramount to the success of a corporation, especially in the
long run. It is important to understand that in the study of finance, intangible assets, such as a
good reputation, matter more to a corporation than do short term profits. By continuing on with
an emphasis on social responsibility, Brown Forman is setting itself up for long term success.