Case ID: UVAF1512
Solution ID: 21586
Words: 325
Price $ 75

Horniman Horticulture Case Solution

Case Solution

This case captures the cash-flow and working-capital management problems typical of small, growing businesses. At the end of 2005, Bob and Maggie Brown have completed their third year of operating Horniman Horticulture, a $1-million-revenue woody-shrub grower in central Virginia. While experiencing booming demand and improving margins, the couple are puzzled by their plummeting cash balance. The case highlights the difference between cash flow and accounting profits, as well as the common negative effects of growth on cash flow. The case provides a forum for establishing appreciation for the relevance of free cash flow to business owners and managers, introducing financial ratio analysis, developing the concept of the cash cycle and working-capital management, and motivating the use of financial models.

Excel Calculations

·         Projected Financial Summary for Horniman Horticulture                                                               

·         Pro Forma Statements 2006       

·         Income Statement         

·         Balance sheet   

·         Profitability Ratios                                                                          

·         Liquidity Ratios                                                             

 ·         Free Cash Computations

Questions Covered

1. Assesses financial performance of Horniman Horticulture, (HH thereafter)?