The Farm Winery

The Farm Winery

Madhav Rajan, Anne Beyer, Jaclyn Foroughi
2014|Case No.A217| Length 10 pgs.

In early December 2013, Jim Madsen, co-founder and owner of The Farm Winery was preparing the company’s current and longer-term financing needs. Madsen needed to develop plans for fiscal year 2014, which included specific goals that were crucial to the success of the business. First, although the founders had historically contributed capital to meet seasonal cash needs, they were determined to achieve a point of self-sustainability. Next, the business required additional capital expenditures to supplement purchases made at the beginning of the business five years earlier. Finally, the team needed to determine whether to make an investment in additional vineyard development that would require a substantial cash outlay in the coming fiscal year but would not yield any fiscal benefit until nearly a decade later.

This case describes The Farm Winery’s background, past operating performance, distribution/sales, production, and financing in order to develop plans for fiscal year 2014 and determine the attainability of goals crucial to the success of the business.

Learning Objective

Provide students with an opportunity to analyze balance sheets and budgets in order to prepare a projected balance sheet and determine whether financial goals can be achieved for a small business with seasonal/cyclical cash flows.

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