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Horniman Horticulture Case Solution

Solution Id Length Case Author Case Publisher
770 320 Words (4 Pages) Michael J. Schill Darden School of Business : UV1189
This solution includes: A Word File A Word File and An Excel File An Excel File

For the owners of Horniman horticulture, the most pressing issues include:

  • Projection of the 2006 financial statements

  • Analysis of the 2006 cash flows, cash balance and capital expenditure needs

  • Finalization of the decision regarding the financing of purchase (Capital Expenditure)


Horniman Horticulture Case Analysis

The common size financial statements of Horniman Horticulture are shown in the following table.

The projections for 2006 indicate that the revenue will experience a gross change of 30%. This is a substantial increase in comparison to the relevant figures of the past year. Apart from the depreciation, capital expenditure, cash balance and the net worth, all figures of income statement and balance sheet are expressed after taking the average of its percentage with revenues. The pro-forma financial statements of the year 2006 are shown below.

The cash will increase by 30% but the huge capital expenditure of $75000 will reduce it to -$62,780. The historical and forecasted profitability and liquidity ratios are depicted in the following table alongside the free cash flows of the given years.

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