Measuring the Profitability and Liquidity of Viticulture and Wine Production During the Roman Empire
Open Access
- Author:
- Lehmann, Peter
- Area of Honors:
- Interdisciplinary in Finance and Classics and Ancient Mediterranean Studies
- Degree:
- Bachelor of Science
- Document Type:
- Thesis
- Thesis Supervisors:
- Jake Nabel, Thesis Supervisor
Erin Mc Kenna Hanses, Thesis Honors Advisor
Brian Spangler Davis, Thesis Supervisor - Keywords:
- Roman Empire
Viticulture
Wine
Profitability
Liquidity
Roman Agriculture
Relative Return
Average Net Margin
Gross Profit
Operating Profit
Net Income
EBITDA
Levered Free Cash Flow
Net Present Value
Internal Rate of Return
Time Value of Money
Revenue - Abstract:
- The production of agricultural goods and services within the Roman economy was necessary in acquiring political and economic wealth. Only few primary writers, however, discuss the exact financial gain behind such investments. In particular, viticulture, or the cultivation of harvesting grapes into wine, was known to drive high levels of returns on capital for wealthy Roman landowners. This thesis will serve to better understand Roman viticulture as a whole, including the functions of business operations in relation to its investable return. More specifically, this thesis concludes relative return on capital, or measures of profitability and liquidity, based upon the development of a multi-year period financial model of a Roman vineyard. Subsequently, by reviewing both primary and secondary sources, the financial model further serves to justify financial gain and long-term success, as well as its importance to the Roman economy. Although modern scholars have discussed the profitability of Roman vineyards, none have carefully examined levels of liquidity, including solvency and cash flow-related metrics. Using a more dynamic approach, different assumptions can be made on the relative return on capital of Roman viticulture as it relates to geographical location and political rulership under the empire. Ultimately, given the high degree of variability in viticulture, this research and analysis will offer keener insights into the finances behind Roman vineyards as businesses.