3
HORNIMAN HORTICULTURE
Projected Horniman Horticulture Financial Summary (in thousands of dollars)
	2002	2003	2004	2005	2006E
Profit and loss statement
Revenue	788.5	807.6	908.2	1048.8	1363.44	30.0%
Cost of goods sold	402.9	428.8	437.7	503.4	654.42
Gross profit	385.6	378.8	470.5	545.4	709.02
SG&A expense	301.2	302.0	356.0	404.5	525.85
Depreciation	34.2	38.4	36.3	40.9	46.00
Operating profit	50.2	38.4	78.2	100.0	137.17
Taxes	17.6	13.1	26.2	39.2	48.01
Net profit	32.6	25.3	52.0	60.8	89.2
Balance sheet
Cash	120.1	105.2	66.8	9.4	12.2
Accounts receivable	90.6	99.5	119.5	146.4	190.3
Inventory1	468.3	507.6	523.4	656.9	854.0
Other current assets2	20.9	19.3	22.6	20.9	27.2
Current assets	699.9	731.6	732.3	833.6	1083.7
Net fixed assets3	332.1	332.5	384.3	347.9	452.3
Total assets	1032.0	1064.1	1116.6	1181.5	1536.0
Accounts payable	6.0	5.3	4.5	5.0	6.5
Wages payable	19.7	22.0	22.1	24.4	31.7
Other payables	10.2	15.4	16.6	17.9	23.3
Current liabilities	35.9	42.7	43.2	47.3	61.5
Net worth	996.1	1021.4	1073.4	1134.2	1223.4
Capital expenditure	22.0	38.8	88.1	4.5	75.0
Purchases4	140.8	145.2	161.2	185.1	240.6
1 Inventory investment was valued at the lower of cost or market. The cost of inventory was determined by accumulating the costs associated with preparing the plants for sale. Costs that were typically capitalized as inventory included direct labor, materials (soil, water, containers, stakes, labels, chemicals), scrap, and overhead.
2 Other current assets included consigned inventory, prepaid expenses, and assets held for sale.
3 Net fixed assets included land, buildings and improvements, equipment, and software.
4 Purchases represented the annual amount paid to suppliers.
QUESTION: Perform a sensativity analysis on the cash shortfall using at leaset 2 different revenue growth rates above and below the current rate. (IE. with 5% increments). Discuss your results and Please show all steps. Thank you.