Case in Finance

FIN3CSF Case Studies in Finance

Semester 2, 2012

Case Study 2: Financial Analysis and Forecasting

Due date: 4.00 pm, Monday, September 3, 2012

Case 9: Horniman Horticulture

Use the information in Case 9 to answer the following questions.

1. Assess the strengths and weaknesses of the company Horniman Horticulture.

2. How is the company using its cash?

3. What do you expect the financial position of the business to be in 2006?

Extend the financial statements (i.e. Balance sheet and Profit and Loss statements) through 2006, assuming that Bob Brown grows revenue by 25%. Note: To make the balance sheet balance, define cash as equal to (Current liabilities + Net worth) – (Accounts receivable + Inventory + Other current assets + Net fixed assets).

4. Assess the company’s accounts-payable policy.

5. What can the company do to solve its cash problem?

6. What has been the fundamental problem of the company?

Supporting materials

• [B] Case 9, pp. 137-141.

• Supporting spreadsheet: Case_9.xls.

• The technical note “The Thoughtful Forecaster” (in Case 5) provides an overview of financial ratios and forecasting, with the objective of assisting students in developing meaningful financial forecasts.

• Signed and dated Statement of Authorship (individual or group):

http://www.latrobe.edu.au/students/fbel/assets/downloads/FBEL-2012-academic-integrity-student-declaration-form1.pdf

Submission

1. Length: 1,000 words (+/- 10%).

2. Use Times New Roman 12-point font.

3. A paper copy of your assignment (including text and printed spreadsheet, and signed/dated assignment cover sheet/Statement of Authorship [individual or group]) should be deposited in the nominated assignment box, Donald Whitehead Building, level two (2), by 4.00 pm, Monday, September 3, 2012.

4. An electronic version of the same assignment should be submitted to the LMS site for this subject by 4.00 pm, Monday, September 3, 2012.