Anheuser-Busch
Prepared by:
Adam Kiersey
Financial Systems Management
Prepared for:
Sherrie Bertram
Introduction
I have preformed a financial analysis for Anheuser-Busch during the fiscal years of 2004
to 2007 through analyzing the organization’s annual 10K and 10Q reports from Securities
Exchange Commission. I analyzed the company’s income statements, balance sheets, statements
of cash flows, and statements of owners’ equity. I conducted a horizontal analysis using the past
four fiscal years of operation and prepared a three year financial ratio analysis for AnheuserBusch. I compared their financial data ratios of Anheuser-Busch with their major competitors,
Heineken and MolsonCoors, and well as their industry averages.
Anheuser-Busch SIC code is 5181, which indicates that it competes in the beer and ale
business. Its financial reporting year ends each December 31. Anheuser-Busch is the producer of
various beverages including the Budweiser family, the Natural Light family, the Michelob family
(malt liquor), 180 Blue (energy drink), and Bacardi (specialty malt beverages). It also owns Sea
World, Discovery Cove Vacations, and Busch Garden Vacations. Anheuser-Busch is
headquartered in St. Louis, MO. August A. Busch IV is the current president and CEO (Lexis
Nexis).
Anheuser-Busch currently holds 48% of the beer market share in the United States. It
also owns a 50% stake in Mexico's top brewer, Grupo Modelo, the producer of Corona and
Negra Modelo (Aspen and Gellar, 2008). Also, in 2008 Anheuser-Busch accepted an acquisition
offer from a Belgium brewer, InBev, which was finalized on November 20, 2008.
Page 2 of 25
Horizontal Analysis
Chart 1: Anheuser-Busch
Chart 2: Anheuser-Busch
During the last four years, Anheuser-Busch’s sales have continued to steadily increase. From
2004 to 2007 sales increased by a total of 11.728%. The largest sale increase came between the years of
2006 to 2007 where sales increased by 6.163%. This increase in sales was mainly due to the 6% increase
in the price per barrel within the United States. International sales increased 10% due to the 50% equity
investment with Grupo Modelo which has continued to claim the greater part of international profits.
Between the fiscal years of 2004 to 2005 net income decreased 17.66%. This was from an
increase in commodity price increase for items such as raw materials (i.e. aluminum and glass). There
was a 12% increase in energy cost due to the shutdowns of refineries and oil and natural gas platforms
along the Gulf Coast. From 2005 to 2006 net income increased 12.7%. The increases came partly from a
$7.8 million dollar gain from deferred income taxing from state income tax reform legislation.
Page 3 of 25
Chart 3: Anheuser-Busch
Chart 4: Anheuser-Busch
Between the fiscal years of 2004 to 2005 there was a decrease of 15.42% in earnings per share.
This large decrease was caused by the loss of net income from this year, which was previously discussed.
From 2005 to 2006 earnings per share increased 13.8%, this increase also came from a $7.8 million dollar
gain from deferred income taxing from state income tax reform legislation. During 2006 between 2006
and 2007 Anheuser-Busch saw an increase of 10.98% in earnings per share. This increase was caused by
a decrease in the amount of basic weighted-average common shares.
Anheuser-Busch year-end market price per share is consistent throughout the past four years.
Between the years 2004 to 2005 Anheuser-Busch experienced a decrease of 15.3%. This can be explained
by the 15.4% decrease in earnings per share during the same period (Historical Stock Quotes).
Page 4 of 25
Chart 5: Anheuser-Busch
Chart 6: Anheuser-Busch
Anheuser-Busch’s assets steadily increased each year except for 2006, when it decreased
slightly by 1% or $177.8 million. This is because of the decrease of 45.6% in deposits and other
assets from 2005 to 2006. The largest increase of 4.76% in total assets came from 2006 to 2007.
This increase is mainly from the amount of cash, including inventory and accounts receivable.
The total cash for Anheuser-Busch remained consistent from 2004 to 2006. However in
2007 there is an increase in total cash is from an 8.5% increase in operating activities, a 5.4%
increase in investing activities, and a 4.9% increase in financing activities. This resulted in an
overall increase of 29.1%.
Page 5 of 25
Chart 7: Anheuser-Busch
Current Ratio
0.96
0.8871
0.8788
0.88
0.8145
0.80
0.72
Current Ratio
2005
2006
2007
0.8871
0.8145
0.8788
For the 3 years, 2005-2007, Anheuser-Busch had minimal fluctuation in their
current ratio as it stayed between .81 and .89. The current ratio for 2005 was .8871 with
current assets around 1.7 billion and current liabilities above 1.9 billion. The next year
the company’s current ratio decreased to .8145. The main cause for this was an increase
in the current liabilities, from 1.9 billion dollars to over 2.2 billion dollars. This was
because accounts payable increased by 200 million dollars and also a 100 million dollar
increase in accrued salaries, wages, and benefits. Due to the liabilities increasing and the
current assets unchanged, the current ratio decreased. The year 2007 saw the current ratio
increase to.8788. This was due to current assets increasing by 9.63% and current
liabilities unchanged. The increase in current assets for fiscal year 2007 is mainly because
of the increase in cash and cash equivalents, and inventory.
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Quick Ratio: Chart 8
0.57
0.56
0.55
0.54
0.53
0.52
0.51
2004
2005
2006
2007
The quick ration, or acid ratio, is an indicator of a company's short-term liquidity.
To find the quick ration you take the current assets subtract the inventories and then
divide that by the current liabilities. The quick ratio measures a company's ability to
meet its short-term obligations with its most liquid assets. The higher the quick ratio
is, the better the position of the company. The quick ratio for Anheuser-Bush shows that
there was no change from 2004 to 2005. There was a drop from 2005 to 2006 by 4%.
This was caused by an increase in inventories and current assets as well as an increase in
current liabilities. There was an increase from 2006 to 2007 by 3% in the quick ratio that
shows that the company did better in the fiscal year 2007.
Page 7 of 25
Total Asset Turnover
Chart 9: Anheuser-Bush
0.98
0.97
0.96
0.95
0.94
0.93
0.92
0.91
0.9
0.89
0.88
2004
2005
2006
2007
Total asset turnover is the amount of sales generated for every dollar's worth of
assets. It is calculated by dividing sales in dollars by assets in dollars. The formula for
asset turnover is revenue/assets. Asset turnover measures a firm's efficiency at using its
assets in generating sales or revenue; the higher the number the better. It also indicates
pricing strategy: companies with low profit margins tend to have high asset turnover,
while those with high profit margins have low asset turnover. From 2004 to 2005 the total
asset turnover decreased by .01 and from 2005 to 2006 the ratio went up from .91 to .96.
This was an increase of .05.
Page 8 of 25
Chart 10: Anheuser-Bush
Debt Ratio
0.83
0.82
0.81
0.8
0.79
0.78
0.77
0.76
0.75
0.74
0.73
Debt Ratio
0.8163
0.798
0.7595
Dec. 2005
Dec. 2006
Dec. 2007
0.798
0.7595
0.8163
Anheuser-Busch debt ratio changed dramatically each year. In the year 2005
Anheuser-Busch debt ratio was .798 with total debt at 13.2 billion dollars and total assets
at 16.55 billion dollars. In the following year, 2006, the debt ratio decreased by 4.83% to
.7595. This number can be explained due to total debt decreasing from $13.2 billion to
$12.4 billion and total assets unchanged. The fiscal year 2007 saw the debt ratio increase
by 6.96% to .8162. Looking at the statement, total debt for Anheuser-Busch increased
from $12.4 billion to $14 billion and total assets increased from $16.3 billion to $17.1
billion. The $1.6 billion increase in total debt can be credited to substantial increases in
accounts payable and long term debt.
Page 9 of 25
Chart 11: Anheuser-Busch
Return on Total Assets
11.9996
12.3305
Dec. 2005
Dec. 2006
Dec. 2007
10.5370
11.9996
12.3305
13.00
11.00
10.5370
9.00
7.00
5.00
3.00
1.00
Return on Total Assets
Anheuser-Busch return on total assets had minimal change from 2005 to 2007,
ranging from low of 10.5370% and high of 12.3305%. The fiscal year of 2005 saw net
income at $1.7 billion and total assets at $16.5 billion, a ratio of 10.5370%. Year 2006
net income increase by over $200 million and total assets decrease to under $16.4 billion,
which is the cause for the increase in return on total assets. 2007 net income increased
from $1.9 billion to $2.1 billion. There was an increase in total assets by 4.53% to $17.15
billion.
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Chart 12: Anheuser-Busch
Return on Common Equity
3.55%
3.50%
3.45%
3.40%
3.35%
3.30%
3.25%
3.20%
3.15%
3.10%
3.05%
2005
2006
2007
Return on common equity is the amount of net income returned as a percentage of
shareholders equity. Return on equity measures a corporation's profitability by revealing
how much profit a company generates with the money shareholders have invested. ROE
is expressed as a percentage and calculated as:
Return on Equity = Net Income/Shareholder's Equity
Net income is for the full fiscal year (before dividends paid to common stock holders but
after dividends to preferred stock.) Shareholder's equity does not include preferred shares.
The return on common equity in 2005 was 3.5% and went down to 3.3% in 2006. From
2006 to 2007 the return on common equity went down again to 3.2%.
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Chart 13: Anheuser-Busch
Return on Total Stockholders' Equity
70
67.1183
65
60
55
52.1760
49.8946
50
45
40
Return on Total
Stockholders' Equity
Dec. 2005
Dec. 2006
Dec. 2007
52.1760
49.8946
67.1183
Anheuser-Busch return on total stockholders’ equity changed dramatically in the 3 years.
There was a decrease in the return on stockholders’ equity by 2.28% due to stockholders’ equity
increasing by 15.12% from 2005 to 2006. In 2006, the return on stockholders’ equity was
49.8946% with net income of $1.96 billion and stockholders’ equity of $3.9 billion. 2007 saw a
significant increase of 17.22% jump in return on stockholders’ equity. This was due to an
increase in net income of $150 million and a decrease in stockholders’ equity from $3.9 billion to
$3.15 billion. Also there was a 16.9% increase in treasury stock due to Anheuser-Busch
purchasing their own common stock. This put the return on stockholders’ equity percent at
67.1183%.
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Analysis of Income Statement, Balance Sheet, and Cash Flow Statement
INCOME STATEMENT
Anheuser-Busch’s revenue increased net of an excise tax of $2,240,700,000 in 2006 and
$2,303,000,000 in 2007, from $15,717,100,000 in 2006 to $16,685,700,000 in 2007, a 6.2%
increase. The revenue increase in a large part is due to increased international sales in China,
Canada, and Mexico. As a result of increased revenue, gross profit increased from
$5,552,100,000 to $5,849,600,000 which is a 5.4% increase from 2006 to 2007.
Anheuser-Busch’s general and administration expenses had a 5.3% increase from 2006 to
2007 increasing from $2,832,500,000 in 2006 to $2,982,100,000 in 2007. In 2007 there was a
$26,500,000 gain on the sale of certain beer distribution rights in Southern California.
Anheuser-Busch’s operating income increased from $2,719,600,000 in 2006 to $2,894,000,000
in 2007, a $174,400,000 increase.
There was a 7.6% increase in Anheuser-Busch’s total net income which included the
provision for income taxes. These taxes were $900,500,000 in 2006 and $969,800,000 in 2007,
a 7.7% increase. The increase in net income is due in a large part to increased International
sales, which accounts for 20% of sales. Anheuser-Busch also implemented price increases and
discount reductions effectively increasing domestic sales by $308,000,000. Net income was also
impacted by a onetime tax event offered in 2005 and 2006. Anheuser-Busch’s total net income
increased from $1,965,200,000 in 2006 to $2,115,300,000 in 2007.
BALANCE SHEET
Current Assets increased from $1,829,500,000 in 2006 to $2,024,500,000 in 2007, a
10.7%. Current liabilities also increased by $57,700,000; from $2,246,100,000 in 2006 to
$2,303,800,000 in 2007. The main factor affecting current liabilities is accounts payable. In
Page 13 of 25
2006 accounts payable was $1,462,300,000 and 2007 it was $1,464,500,000 compared to the
other current liabilities of 819,800,000 in 2006 and $839,300,000 in 2007. In regards to current
asset, accounts receivable and inventories account for most of this number. Accounts receivable
increased from $720,000,000 in 2006 to $805,200,000 in 2007 and inventories increased from
$694,900,000 to $723,500,000.
Plant and equipment had a .9% decrease, from $8,916,100,000 in 2006 to $8,833,500,000
in 2007. Retirement benefits decreased from $1,191,500,000 in 2006 to $1,002,500,000 in 2007,
a 15.9% decrease.
Anheuser-Busch had a substantial increase in long-term debt from 2006 to 2007. It
increased from $7,653,500,000 in 2006 to $9,140,300,000 in 2007, a 19.4% increase.
Total shareholders’ equity decreased from $3,938,700,000 in 2006 to $3,151,600,000 in
2007. This decrease is due in a large part to the amount of treasury stock purchased from 2006
to 2007. In 2006, Anheuser-Busch had $16,007,700,000 in treasury stock where as in 2007; they
acquired $18,714,700,000, a 16.9% increase.
CASH FLOWS
Net cash flows provided by operating activities increased from $2,709,400,000 in 2006 to
$2,939,600,000 in 2007. This increase is due to several factors. In 2007, depreciation and
amortization increased from $988,700,000 in 2006 to $996,200,000. Also, undistributed
earnings of affiliated companies decreased from $341,800,000 in 2006 to $249,100,000 in 2007.
Also in 2007, Anheuser-Busch’s working capital increased by $23,500,000.
Net cash used for investing activities increased from $913,500,000 in 2006 to
$984,100,000 in 2007, a 7.7% increase. This is mostly due to the increase in capital
expenditures from $812,500,000 in 2006 to $870,000,000 in 2007.
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Anheuser-Busch’s net cash used for financing activities slightly increased from
$1,802,500,000 in 2006 to $1,891,500,000 in 2007. This increase is due to several factors. One
key factor is the increase in debt. It increased from $334,800,000 in 2006 to $1,708,200,000.
Another factor is the dividends paid to shareholders increasing from $871,600,000 in 2006 to
$932,400,000 in 2007. Acquisition of treasury stock was also a main factor increasing from
$745,900,000 in 2006 to $2,707,100,000 in 2007.
Thorough Analysis of Statement of Cash Flows
In 2005 Anheuser-Busch’s net cash during the year decreased from $228,100,000 to
$225,800,000; a $2,300,000 decrease. In 2006 their net cash decreased from $225,800,000 at the
beginning of the year to $219,200,000 at the end of the year; a $6,600,000 decrease. And in
2007 Anheuser-Busch’s net cash increased from $219,200,000 to $283,200,000; a substantially
large increase of $64,000,000. This section will analyze why these numbers fluctuated.
Anheuser-Busch’s cash flows from operating activities continued to increase over the
past three years. The table below is a list of areas provided from the Anheuser-Busch annual
report in regards to their operating activities.
Page 15 of 25
Cash Flows from Operating Activities (in millions): Anheuser-Busch
2005
2006
2007
Net Income
1,744.4
1,965.2
2,115.3
Depreciation and Amortization
979.0
988.7
996.2
Stock Compensation Expense
134.1
122.9
135.9
Decrease in Deferred Income
Taxes
(39.1)
(45.8)
(65.9)
Gain on Sale of Business
(15.4)
0.0
(42.5)
Undistributed Earnings of
Affiliated
Companies
(288.0)
(341.8)
(249.1)
136.6
(168.6)
73.2
Operating Cash Flow before
the
change in Working Capital
2,651.6
2520.6
2,963.1
Increase/Decrease in Working
Capital
50.3
188.8
(23.5)
Cash provided by
Operating Activities
2,701.9
2,709.4
2,939.6
Other, Net
Due to several factors, from the fiscal years 2005 to 2007, Anheuser-Busch’s net cash
provided by operating activities increased from $2,701,900,000 to $2,939,600,000; a net increase
of $237,700,000. Anheuser-Busch’s net income increased substantially each year. Net income
was a major factor, increasing continuously from 2005 to 2007, an increase of $1,744,400,000 to
$2,115,300,000. Depreciation and amortization was also a large factor in the cash provided by
operating activities which increased consistently from 2005 to 2007, with a $17,200,000 total
increase.
In 2005, stock compensation expense was $134,100,000 and decreased to $122,900,000
in 2006. But, in 2007, it increased to 135,900,000. Undistributed earnings of affiliated
Page 16 of 25
companies took a large part in the operating cash flow increasing from $288,000,000 in 2005, to
$341,800,000 in 2006, to $249,100,000 in 2007.
Net cash used for investing activities has decreased from $1,088,400,000 to $913,500,000
in 2005 to 2006. In 2007 net cash used from investing activities increased from $913,500,000 in
2006 to $984,100,000 in 2007. The following table was provided from Anheuser-Busch’s
Consolidated Cash Flow Statement and shows the main areas of their investing activities.
Cash Flows from Investing Activities (in millions): Anheuser-Busch
2005
2006
2007
(1,136.7)
(812.5)
(870.0)
New Business Acquisitions
0.0
(101.0)
(155.7)
Proceeds from Sale of
Business
48.3
0.0
41.6
(1,088.4)
(913.5)
(984.1)
Capital Expenditures
Cash used for Investing
Activities
From fiscal years 2005 to 2006, net cash used for investing activities decreased from
$1,088,400,000 to $913,500,000. From fiscal years 2006 to 2007, net cash used for investing
activities increased from $913,500,000 to $984,100,000. 2005’s net cash from investing
activities of $1,088,400,000 is due in large part to capital expenditures which decreased by
$324,200,000 from 2005 to 2006 and increased from 2006 to 2007 by $57,500,000. Proceeds
from the sale of a Spanish Theme Park and gains from sales of distribution rights in South
California in 2007 affected net cash used from investing activities by $89,900,000. Also in
2006 and 2007, Anheuser-Busch formed new business acquisitions which also affected net cash
used for investing activities.
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Net cash used for financing activities has continued to increase from $1,615,800,000 in
2005 to $1,891,500,000 in 2007. The following table from Anheuser-Busch’s Consolidated
Statement of Cash Flows shows some of the main factors affecting their cash used for financing
activities.
Cash Flows from Financing Activities (in millions): Anheuser-Busch
2005
2006
2007
Increase/ (Decrease) in Debt
(356.0)
(328.5)
1443.2
Dividends Paid to
Shareholders
(800.8)
(871.6)
(932.4)
Acquisition of Treasury
Stock
(620.4)
(745.9)
(2,707.1)
161.4
143.5
304.8
(1,615.8)
(1,802.5)
(1,891.5)
Shares Issued under Stock
Plans
Cash used for Financing
Activities
Debt was one factor that affected Anheuser-Busch’s cash used for financing activities. In
2007, there was a $1,708,200,000 increase in debt where as in 2006 there was a $328,500,000
decrease. Dividends paid to shareholders continued to increase by $131,600,000 from fiscal year
2005 to 2007. Another key factor in the cash used for financing activities was the acquisition of
treasury stock. In 2007, the acquisition of treasury stock increased from $745,900,000 in 2006 to
$2,707,100,000 in 2007.
Page 18 of 25
Competitive and Industrial Analysis
From researching Anheuser-Busch I found that the SIC code is 5181 which indicates that
they are in the beer and ale business. Using the SIC code you find that Anheuser Busch’s two
main competitors are Heineken and Molson Coors.
Using different ratios of each company and the industry norms Anheuser-Busch is able to
see where they compare to its competitors and to the industry average. When looking at the
industry average, the companies are compared using the medium quartile.
Current Ratio
Years
2007
2006
Anheuser-Busch
0.8788
0.8145
Heineken
1.0571
0.8737
Molson Coors Industry
1.0238
1.7
0.8101
1.6
When looking at the current ratio you see that Anheuser-Busch is significantly lower than
its competitors and the industry average. Both Anheuser-Busch and its competitors are below the
industry average. Anheuser-Busch’s financial statements show that for 2007 and 2006 that of
their current assets, 36 percent and 39 percent of these assets consisted of inventory. While
Molson Coors inventory only accounted for 20 percent in 2007 and 21 percent in 2006.
Debt Ratio
Years
2007
2006
Anheuser-Busch
0.8162
0.7595
Heineken
0.6146
0.6645
Molson Coors
0.4685
0.4987
Industry
0.5260
0.5760
Anheuser-Busch’s debt ratio is much higher by significant amounts when comparing
theirs to their competitors and the industry average. Anheuser-Busch compared to its competitors
has a great amount of long term debt. Anheuser-Busch has over 9 billion in 2007 and over 7
Page 19 of 25
billion in 2006, while Molson Coors has just over 2 billion in both years and Heineken has only
1.5 billion in 2007 and just over 2 billion in 2006. Anheuser-Busch’s debt ratio jumped from
2006 to 2007 this is due to the buyback of about 17 percent of treasury stock which comes out to
$2.5 billion.
Return on Total Assets
Years
2007
2006
Anheuser Busch
0.1233
0.1199
Heineken
0.1036
0.0735
Molson Coors
0.0394
0.0336
Industry
0.109
0.103
As illustrated above you see that Anheuser-Busch is above both of their competitors and
also above the industry average as well. When you compare Anheuser-Busch to Heineken and
the industry average you see that they are keeping close to each other. Anheuser-Busch’s return
on total assets as been gradually increasing over the years, if you look at their sales you can see
that they have been going up as well, this is that a direct relation to this ratio.
Return on Stockholder’s Equity
Years
2007
2006
Anheuser Busch
0.6712
0.4989
Heineken
0.2687
0.2189
Molson Coors
0.0742
0.0670
Industry
0.222
0.235
Anheuser Busch had a steady return on stockholder’s equity. When comparing Anheuser
Busch to its competitors you see that they have a much higher return than both the competitors
and the industry average. When you look at all three companies’ net income you see that
Anheuser Busch makes roughly 1 billion dollars more than Heineken and 1.5 billion more than
Molson Coors.
Page 20 of 25
Sales (in thousands)
Years
2007
2006
Anheuser- Busch
16,685,700
15,717,100
Heineken
11,829,000
10,796,000
Molson Coors
6,190,592
5,844,985
Industry
17,808,693
17,437,359
As depicted above in the sales chart you see that Anheuser-Busch is higher than both its
competitors, but much higher than Molson Coors. Comparing Anheuser-Busch to the industry
norm you see that they are lower than that of the industry norm.
Net Income (in thousands)
Years
2007
2006
Anheuser-Busch
2,115,300
1,965,200
Heineken
1,212,000
761,000
Molson Coors
497,192
361,031
Industry
707,496
940,119
As you analyze the net income chart you see that Anheuser-Busch is significantly ahead
of Heineken and Molson Coors. Comparing Anheuser-Busch to the industry average you can see
that they are well ahead of them when it comes to net income.
Earnings per share
Years
2007
2006
Anheuser-Busch
2.83
2.55
Heineken
2.47
1.55
Molson Coors
2.78
2.11
Industry
N/A
N/A
Anheuser-Busch’s earnings per share is above both Heineken and Molson Coors.
Anheuser-Busch’s, as well as its competitors have both gone up from 2006 to 2007. Heineken
shows the best improvement from 2006.
Page 21 of 25
Year-end market price per share
Years
2007
2006
Anheuser-Busch
52.34
49.20
Heineken
31.95
23.60
Molson Coors
51.62
76.44
Industry
N/A
N/A
As you look at the year-end market price per share you see that Anheuser-Busch is the
highest in 2007, significantly over Heineken, while Molson Coors is keeping close. AnheuserBusch is increasing from 2007, as is Heineken, but Molson Coors dropped significantly.
Anheuser-Busch’s Financial Strengths
Anheuser-Busch is a strong, financial company with many strengths. Below are a few
strengths that Anheuser-Busch possesses.

Anheuser-Busch and InBev merger will create the world’s leading brewer eclipsing
SABMILLER (Anheuser-Busch.com)

Gross sales continue to increase from 2006 to 2007, increasing from $17,957,800,000 to
$18,988,700,000 due to an increasing number of international sales

Total assets increased from $16,377,200,000 in 2006 to $17,155,000,000 in 2007 due to
investments in affiliated companies, plant and equipment, and intangible assets

Basic earnings per share increased from 2006 to 2007 increased from $2.55 in 2006 to
$2.83 in 2007, an 11% increase, due to a decrease in basic weighted-common shares

Cash and cash equivalents increased by 29.2% from 2006 to 2007

Anheuser-Busch after the merger with InBev will offer over 300 beer brands, which
estimates an increase in sales (Anheuser-Busch.com)
Page 22 of 25

Anheuser-Busch’s cash flow provided by operating activities consistently increased from
2005 to 2007, with a total increase of $237,700,000, which provides cash flows for their
entire company.
Anheuser-Busch’s Financial Weaknesses
Anheuser-Busch is a strong company but we still have found a few weaknesses.

In 2007, Anheuser-Busch’s debt increased by $1,486,800,000, a 19.4% increase

Anheuser-Busch has a high debt ratio compared to their top competitors, and its
increasing
Summary
The financial data of Anheuser-Busch has been increasing each year with the exception
of 2004-2005. Reviewing the horizontal analysis of sales, net income, total assets, and total cash,
Anheuser-Busch has been increasing steadily throughout the years. From 2004 to 2007 sales
have increased by a total of 11.728%. Net income has had minimal change with the exception of
a decrease in net income from ’04-’05, due to the decrease of the domestic market share. It has
recovered and increased back to its net income of 2004. Earnings per share has also increased
steadily from 2005-2007. There was a decrease in EPS from ’04-’05 which was also due to the
decrease in domestic market share, but is now at $2.83 in 2007, .18 cents higher than in 2004.
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Revenues increased from $15,717,100,000 in 2006 to $16,685,700,000 in 2007, a 6.2%
increase. Gross profit increased by 37.8% as a result in 2006 to 2007. Net cash flows provided by
operating activities increased from $2,709,400,000 in 2006 to $2,939,600,000 in 2007.
Overall Anheuser-Busch is a strong company that is financially stable. Being bought out
in November 2008 by Inbev should not hurt the company’s sales but has the potential to increase
sales as Anheuser-Busch Inbev will become the largest brewer in the world.
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Works Cited
Anheuser Busch Cos Inc Financial Information. Lexis Nexis.
<http://www.lexisnexis.com/us/lnacademic/search/companyDossiersubmitForm.do>
Anheuser-Busch Press Release.
<http://www.anheuser-busch.com/Press/PressImages/FINAL%20PRESS%20RELEASE.
pdf>
Aspin, C, & Geller, M (2008, June 17). 'Poison pill' may spoils Anheuser-Busch bid. The
International Herald Tribune. Pg 17
Blackden, Richard. “BREWING Anheuser’s weakened poison pill lures InBev” The Daily
Telegraph (London) 27 October 2008.
Historical Stock Quotes
<http://bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=BUD&close
_date=1%2F12%2F94&x=0&y=0>
InBev Website. < http://www.inbev.com/go/about_inbev/our_company/in_a_few_words.cfm>
Heineken Cos Inc Financial Information. Lexis Nexis.
<http://www.lexisnexis.com/us/lnacademic/search/companyDossiersubmitForm.do>
Jolly, David. “InBev seeks to throw out Anheuser-Busch Board” New York Times. 11
November 2008. Page 12.
Lexis Nexis Website.
<http://www.lexisnexis.com/us/lnacademic/search/companyDossiersubmitForm.do>
“Marises Granted at Least $120M in Lawsuit” The Washington Post. 27 October 2008.
Molson Coors Brewing Co Financial Information. Lexis Nexis.
<http://www.lexisnexis.com/us/lnacademic/search/companyDossiersubmitForm.do>
Sorkin, Andrew Ross. “InBev said to consider bid for Anheuser-Busch”. The New York Times.
24 May 2008. Pg 2
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