Horniman Horticulture Executive Summary: Horniman Horticulture is a wholesale nursery located near Lynchburg‚ VA. Its owned by Bob and Maggie Brown. From 2002-2005‚ the nursery’s operations grew by more then 40%. Revenue growth has exceeded the industry benchmark. The nursery now consists of 52 greenhouses‚ 40 acres of land‚ and 12 full-time workers as well as 15 seasonal workers. Problem: While experiencing booming demand and improving margins‚ the Browns are confused by their plummeting
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Running head: HORNIMAN HORTICULTURE Abstract 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 woody – shrub “Landscape Ready” grower in central Virginia. While experiencing booming demand and improving margins‚ the couple is puzzled by their plummeting cash balance. The case highlights the difference between cash flow and accounting
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Background Horniman Horticulture is a whole-sale nursery business that has been owned by Maggie and Bob for three years. They have seen an increase in business and number of plants grown at the nursery and are expecting demand to continue to grow. In 2005‚ the business’s profit margin was expected to grow to 5.8% up from 3.1% in 2003. This projected growth seems accurate considering Maggie’s conservative approach with the companies cash balance. Handling the finances‚ Maggie dislikes debt financing
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Case #9: HORNIMAN HORTICULTURE Synopsis and Objectives This case captures the problems concerning cash flow and working-capital management 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 nursery in central Virginia. While experiencing booming demand and improving margins‚ the Browns are puzzled by their plummeting cash balance. The case highlights the difference
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(Horniman Horticulture) (a) Horniman Horticulture (Horniman) revenue growth is increasing since 2003 it showing a rapid growth then the industry benchmark‚ which is decreasing by 1.8% per year. In 2004 and 2005 Horniman is constantly growing with increase in the revenue from 2.4% in 2003 to 12.5% in 2005 and 15.5% in 2005 as well as increase in total asset net profit and return on equity respectively‚ which indicate that it’s doing well within the industry. As we can see in exhibit 1 They
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Horniman Horticulture is a wholesale nursery business near Lynchburg‚ Virginia owned by Maggie and Bob. The nursery’s operations is filled with 52 greenhouses and 40 acres of productive fields and employed by 12 full-time employees and 15 seasonal employees. Sales are primarily to retail nurseries throughout the mid-Atlantic region. Throughout the first two years of business‚ Bob increased the number of plant species grown by more than 40%. The increase in number of plant species resulted in
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Case Study 2: Financial Analysis and Forecasting 28/08/2014 Word Count 905 1. Strengths and Weaknesses of Horniman Horticulture Strengths: - Business growth is positively increasing (Revenue increased 15% from 2004) - Pay suppliers early which allows Horniman Horticulture to obtain a trade discount on purchases - No bank loan‚ ability to avoid borrowing from the bank to fund business functions Weaknesses: - Margins heavily reliant on fixed expense prices (Wages and Interest
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Case Study 2: Financial Analysis and Forecasting 1. Strengths: - Profitability Ratios: Constant growth from 2002-05‚ particularly year 2004 and 2005 with impressive growth in revenue with12.5% and 15.5% respectively‚ much higher than the benchmark just -1.8%. Gross‚ operating and net profit margin were all performing better than the benchmarks. - Management: Co-owner Bob Brown has been brought up to value a strong work ethic‚ which he has obtained through his father since at
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Horniman Horticulture Case Study Current State of Business The factors looked at such as the profit margin‚ ROE‚ and ROA do paint the picture that the current state of the business is good. Revenues have increased on average 10% each year from 2002 to 2005. However during this time cash balances have decreased. Accounts receivable and inventory have increased in the same time span. Cash has decreased from $120.1 to $9.4‚ a decline of 92% over the four year time span. In the same period Accounts
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Case 9: Horniman Horticulture 1. Assess the strengths and weaknesses of the company Horniman Horticulture. Strengths * Constantly growing firm with increasing revenue (15.5% in 2005)‚ net profit‚ total assets and high returns on equity (5.1% in 2005) * Large product offerings‚ with a recent increase of 40%. Majority of offerings are in high demand * Management (in regards to Bob Brown) has good ties with employees and customers * Tax expense hasn’t drastically
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