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Case #: 
A01-17-0012 (A)

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Abstract: 

There are four cases in the Kangaroo Tail Winery Limited series - A, B, C and D. Each case focusses on a different aspect of financial accounting. The cases may be used together or independently.

Two Australian entrepreneurs, Anna Amphlett and Andrew Ferris decided to start a new venture to produce, market and distribute high quality premium wine in Tasmania, an island off the southern coast of Australia. Amphlett and Ferris developed a business plan for a winery business based on a new brand to be called Kangaroo Tail. Amphlett and Ferris were retired executives each with more that twenty years of experience at Constellation Brands Inc. and Treasury Wine Estates. After a year of experimentation Amphlett and Ferris finally settled upon a blend that yielded wines with the right aroma, taste, and color. They negotiated a loan requiring them to provide the bank with a business plan and projected financial statements. They are unsure whether the wine operation will be a profitable use of their capital.

Teaching: 
The (A) case focuses on a preliminary cost analysis for the winery operation and enables students to examine the company’s cost structure (fixed versus variable costs) and prepare a break-even analysis. The (B) case asks students to develop and analyze projected financial statements, including a balance sheet, statement of cash flows and an income statement for the first year of operation. The bank will use the financial statements as a basis for deciding whether to lend to the Kangaroo Tail Winery. The (C) case asks students to prepare a cash flow statement for the first year of operations using the indirect method. After several years of operations, the (D) case asked students to analyze the financial performance of the company during the recent three years. Students can also examine the company’s financial strategy in order to determine whether the company is able to stay within the newly established borrowing limits negotiated with the company’s bank. The series has been used in MBA courses.
Year: 
2017

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Setting: 
Australia
Length: 
3 pages
Source: 
Library

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