Guidelines for forecasting work in Ceres Gardening Case

The analysis of Ceres Gardening should focus on forecasting the Income Statement, Balance Sheet and Statement of Cash Flows for years 2007-2009, as indicated on the Student Spreadsheet accompanying the case. You will need to make, specify and explain your assumptions about sales growth, and the relationship between sales and Cost of Goods Sold and other relevant variables in the three financial statements, in your analysis. Use these forecasts to develop and explain the problem Ceres Gardening management is now facing, and to support and document your recommended solutions to the problem.

To guide your analysis, consider these questions:

1. How has the company grown through 2006? (e.g., What role did their marketing strategy play in its recent growth? What are its growth prospects in 2007 through 2009?

2. Is Ceres financially healthy? What parts of the financial statements might be a reason for confidence or a cause of concern? Focus on the most important of each of these.

3. Is their current Marketing Strategy sustainable? Define the strategy and explain. What role do the Inventory (including the leftover inventory of seeds held by the Garden Centers that did not sell the previous season) and Accounts Receivable accounts play in its success or failure?

The Executive Summary should be two-page long document, double-spaced, 12-font, internally consistent, and free of spelling, sentence structure, or factual errors.

You may include UP TO two addition pages of analysis which explain your assumptions and defend your definition and your recommended solution to the problem.

Any quantitative results or analysis should be presented in plain language directed to a non-technical reader and should be justified in attached appendices which derive and document the figures.

In this case, at a minimum you must attach your completed forecasted financial statements to your analysis.

Remember that the readers should fully understand your tables and appendices by reading your written explanation in the body of the analysis. The tables and appendices are there for reference only, if the reader
would like to confirm or further explore the derivation or assumptions.