Case 9: Horniman Horticulture Essay

1446 Words Oct 3rd, 2013 6 Pages
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 young age by working for his father at the mill. After finishing his study, he returned to the mill and excelled at his job (supervisor) and was highly respected. Bob was a “people person”, his warm personality made beloved by all customers and
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| |2002 |2003 |2004 |2005 |2006E |20% |
|Profit and loss statement | | | | | | |
|Revenue |788.50 |807.60 |908.20 |1048.80 |1258.56 | |
| Cost of goods sold |402.90 |428.80 |437.70 |503.40 |630.49 | |
| |51.10% |53.10% |48.19% |48.00% |50.10% |Percentage of Sales |
|Gross profit |385.60 |378.80 |470.50 |545.40 |628.07 | |
|SG&A expense |301.20 |302.00 |356.00 |404.50 |482.53 | |
| |38.20% |37.39% |39.20% |38.57% |38.34% |Percentage of Sales |
|Depreciation |34.20 |38.40 |36.30 |40.90 |37.45 |Average over 4 years |
| Operating profit |50.20 |38.40 |78.20 |100.00 |108.09 | |
|Taxes |17.60 |13.10 |26.20

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