Ceres Gardening Ceres Gardening Company Case Study 1. How has the company grown? What is its basic strategy + how has it evolved? What have been the key factors in the company's growth? The growth of the company has been fueled by the market demand growth in organic products. Ceres increased their revenues by over 75% in just five years, while growing profits by over 25% (based on Exhibits 2, 3 & 4). Ceres’s basic strategy started with its founder, Jonathan Wydown, to promote sustainable organic gardens and landscapes to environmentally conscious consumers. Mr. Wydown has been a proponent of soil preservation, biodiversity, and natural fertilizers and pest control. Mr. Wydown was confident that the same principles behind …show more content…
* Debt Equity shows Ceres’ financial leverage and its aggressive posture in financing its growth with debt. The company could potentially generate more earnings than it would have without this outside financing. This indicates that even with Ceres’ expansion of distribution channels, extension of payment terms, and the creation of a direct sales force, Ceres was able to manage to stay below 1 with a mean average of .74. * Inventory Turnover shows an efficient turnover of inventory. Ceres does not hold inventory for long periods of time, which can incur additional costs by having assets sit without revenue generation. It shows Ceres’ ability to manage inventory in a seasonal cycle and further indicates their ability to forecast demands on product movement. * Accounts Receivable shows Ceres’ effectiveness in extending credit as well as collecting debts. The extended payment terms appear to be working. The prompt collection of debts enables Ceres’ to use the monies to reinvest into the business. Table 1 - Ratios Used Ratios | 2002 | 2003 | 2004 | 2005 | 2006E | Mean | Current RatioCurrent Assets/Current Liabilities | 3.10 | 2.63 | 2.18 | 2.13 | 2.01 | 2.41 | Quick Ratio(Current Assets-Inventories)/Current Liabilities | 1.78 | 1.79 | 1.59 | 1.68 | 1.63 | 1.70 | Debt Equity(Total Liabilities/Shareholders Equity) | .47 | .55 | .76 | .89 | 1.05 | .74 | Inventory
1. What is their business strategy to grow profitably and compete over the long term?
In regards to inventory turnover in 2009, CVS experienced a favorable amount of inventory on hand compared to cost of goods sold. When comparing this result to 2011 it climbed to 10.66, which improves the company’s regulation of managing inventory. From 2009 to 2010 there was an improvement
The main question of the study is how financially well the company is at the moment and what investment expectation it generates on the market nowdays.
Use the following information on a company’s investments in equity securities to answer questions 1- 4 below.
The inventory turnover is a ratio showing how many times a company´s inventory is sold and replaced over a period.“ The inventory turnover has been fairly stable over the last 5 years.
A. Ceres will switch to a more conservative, slow growth and marketing approach in response to increasing debt and decreasing cash flows. Our ratio analysis (Exhibit 2) has identified that the company is growing too fast and is putting considerable strains on its resources, raising the possibility of bankruptcy in the near future. The 2006 pro-forma statement calculates a 98-day payable period, with suppliers already angry at the 90-day period. Profit margins are decreasing and the plummet in NOCF is worrying (Exhibit 1). The company is not generating enough business from operating activities and is debt financing. As a result of GetCeres, AGE, Inventory and AP have increased significantly more than sales, resulting in a lack of cash. All leverage and liquidity ratios (Exhibit 2) confirm that. Our first policy is to slow down growth to the sustainable growth rate, calculated at 12%
Inventory turnover measures the company’s efficiency in turning its inventory into sales. Its purpose is to measure the liquidity of the inventory (Carey, 2009)
Hurst, B. (2009, July 30). The Omnivore's Delusion: Against the Agri-intellectuals. Retrieved March 28, 2012, from http://www.american.com/archive/2009/july/the-omnivore2019s-delusion-against-the-agri-intellectuals
Landry’s Debt to Asset ratio also increased from year 2002 to 2003. In 2002 Landry had a debt to asset ratio of 0.39. In 2003 Landry’s debt to asset ratio increased to 0.45. While both numbers are acceptable and considerably low, the increase from 2002 to 2003 could influence potential investors to not invest in Landry’s stock. This increase also suggests that Landry’s debt also increased from 2002 to 2003. Overall, while there was a slight increase from 2002 to 2003 Landry’s still had a good debt to asset ratio. We think that a contributing factor to the debt
This chapter was about the struggle of living with locally grown food and cloth diapers. Colin Beavan got in touch with some foodies and asked what they did for eating environmentally conscience. And Colin and his wife found other activities to do during their normal TV time, like preparing ingredients for their meals and spending time with their friends. Colin even went as far as to visit the farm that he gets his milk from just to see if the farmer’s ideals lined up with his.
1. What is Cooper’s corporate strategy? How is Cooper Industries adding corporate value to its portfolio of businesses? Would you recommend any changes in corporate strategy?
1.-Describe two major ways in which a company can grow. Give examples to illustrate the two ways of growing.
Many consumers and farmers have discovered that living in an industrialized culture where the focus has become faster, bigger, and cheaper is not the best way to produce our food. Obsessed with productivity, the agriculture industry is reaping the negative consequences of creating an unsustainable environment for food production. Time and time again, the media captures stories regarding deadly bacterial contamination and dangerous pesticide contamination causing illness and death in our communities. The environment is also damaged and contaminated. This devastating trend, due to irresponsible farming practices as a result of the industrialization of the food industry, has become all too common. Returning to organic farming,
* For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion.
How has the financial structure of the company changed over recent years? How would you assess its financial health?