Ceres Gardening Project
Ceres Gardening Project
Ceres Gardening Project
Question 1
Ans: - Part 1A
Profit estimated for the year 2006E to the ‘cash flow from Operation’=226
Investing cash flow, majorly contributed to decrease in ‘Change in Cash’ by the company
from 2003 to 2006E.
Ans: - Part 1B
Trend in Cash Flow & Reason for the change in cash flow: -
Operating Cash Flow decreases rapidly from 2003 to 2006E as increase in net income &
increase in change in Acc. Receivables with increase in change in Acc. Payables.
Investing Cash Flow decreases from 2003 to 2006E as increase the investments in PP&E and
land also.
Financing Cash flow increases from 2003 to 2005 and decreases from 2005 to 2006E as
increase the issuance of debt with pay the retirement of debt & issuance of dividend decrease
firstly from 2002 to 2006E then increased.
Ans: - Part 1C
Question 2
Ans: - Part 2A
Ans: - Part 2B
Ans: - Part 2C
Ans: - Part 2D
Implication of the long credit period given to dealers, a larger investment in receivables
so it will impact the working capital of the ceres gardening limited.
Question 3
Question 3
RoE is rapidly decreases from 2002 to 2006E. Reason behind the decrease in RoE, due to
increase in Shareholder’s equity.
RoACE
Question 5
Pros: - Strong relationship with existing suppliers, High Margin to its compititers.
As per Balance sheet, Cash flows & income Statement with Pros & cons, I have
recommended not to continuing this program.