SWOT Analysis of Horniman Horticulture

1067 Words Feb 2nd, 2018 4 Pages
2005 Revenues have grown over 39% since 2002 (Pg. 140). Revenues are expected to grow another 25%, over 2005 results, to 1.3 million. Horniman Horticulture is successfully expanding and capturing market share.
The recent product line expansion into mature plants is delivering increased profit margins, however the gains are coming at the cost of increased time to collect accounts receivable.
By most balance sheet ratios, Horniman Horticulture's operations are efficient, operations and profit margins, and delivering above average returns, on both assets and capital (Pg. 141). Unfortunately, analysis of the firm's cash situation suggests a much different assessment. The cash balance has consistently declined, since 2002, and now stands at a level insufficient to cover the firm's current liabilities.
Out of Pocket Growth The upcoming acquisition of land, and the owner's aversion to leverage, explains the rationale behind the decline in cash reserves. The current levels of cash reserves appear to necessitate some financing if the land sale is to be finalized. Financing growth with cash is not only from reserves, but it must be noted that the firm's reinvestment is at the expense of the family's living standards, a family of six is living on a mere $50,000 (Pgs. 137-138).
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