Callebaut Case

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Barry Callebaut is a world’s leading manufacturer of chocolate and cocoa products established in 1996 by Klaus Johann Jacobs. The company was created as a result of the merging of Callebaut – Belgian chocolate producer and Cacao Barry – a French chocolate company. Barry Callebaut’s head office is located in Zürich, Switzerland. The company has 53 factories operating in 30 countries in Europe, North and South America, Asia and Pacific. Barry Callebaut has opened their first Van Houten Beverage Academy center in Kågeröd, Sweden for chocolate, cocoa, and powder-based beverage products. Despite its strong position on the market, the company has a few competitors such as Cadbury, Kraft Foods, Mars, Nestle, Hershey’s, Lindt and Cargill Incorporated.…show more content…
The Current Ratio shows the company’s ability to pay the debts. According to the data provided, the current ratio exceeds 1. Therefore, the current liabilities can be covered by current assets. Furthermore, it is an indicator of good financial health. Despite a decline in the ratio for the past two years, the company’s current ratio has increased in 2016 by 0.03. The data for Quick Ratio was extracted from the Gurufocus.com and is represented in the excel graph below. The Quick Ratio shows the company’s ability to cover its current liabilities with its most liquid assets. For the past five years, the ratio has been fluctuating under 1, which means that the company cannot currently pay its liabilities and would not be attractive investors as a potential company to invest in. Return on Equity ratio points at the company’s efficiency and earnings performance. In the case of Barry Callebaut, the Excel graph shows a slight fluctuation of the ratios in different years. According to Investopedia.com and Readyratios.com, the 12-20% is usually considered by analysts as a good investment quality, whereas Barry Callebaut is currently 0,36% below the lower threshold. Nevertheless, the ratio has been over 13% from 2013 till 1015, which shows that the company efficiently employs its…show more content…
According to Readyratios.com, the Debt to Equity ratio should be normally 1,5-2,0 or smaller. The data in the excel table extracted from the Barry Callebaut Annual report concludes that a company is doing well in terms of its liabilities and equity proportion. Despite a gradual increase in the ratio from 64,9% in 2011 up to 100,7% in 2014, the company’s ratio is currently declining, and is at 74,3% in 2016 which shows that the company is financed more from its own financial sources rather than by those of creditors’. The Payout ratio gives information about the percentage of net income that is used to pay the dividends. Since Barry Callebaut is a large company, its payout ratio is quite high: more than 30%. The payout ratio has been somewhat stable for the last 6 years; yet an increase of 6% can be observed, which means that the company pays 39% of its net income to its shareholders, where the rest 61% is used for other operating costs and
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