1. Please develop a pro-forma financial statement for Nelson Nurseries using percentage of sales approach for the year 2021. Assume that Roger grows revenues by 30%, and determine the AFN for Nelson nurseries. Make sure to state all/any assumptions you make.
2. Assume the Collection period, Days in Inventory and Days in payables remain unchanged from 2020 to 2021. How does this change your AFN calculations?
3. Where does all of Nelson's cash go? Calculate the FCF, the Cash Conversion cycle and NWC to help in answering this question.
4. How does the business end up in this problem with their high profitability? What is the difference between cash and profits? How can a business be profitable and have cash flow problems?

Answer rating: 100% (QA)

Pro forma Financial Statement for Nelson Nurseries using the Percentage of Sales Approach for the Year 2021 Assumptions Revenue growth of 30 compared to 2020 No changes in collection period days in in... View the full answer