Business Case Studies & Business Publications

Nelson Nurseries

Schill, Michael J.

Case

Nelson Nurseries

Schill, Michael J.

F-1944 | Published March 27, 2020 | 4 pages Case

Collection: Darden School of Business

Add To Cart Buy Now

Product Details

This case captures the problems concerning cash flow and working-capital management typical of small, growing businesses. At the end of 2020, Roger and Christine Barton have completed their third year of operating Nelson Nurseries, a $1-million-revenue woody-shrub nursery in central Virginia. While experiencing booming demand and improving margins, the Bartons are puzzled by their plummeting cash balance. The case highlights the difference between cash flow and accounting profits, as well as the common negative effects of growth on cash flow. It also provides a forum for instilling appreciation for the relevance of free cash flow to business owners and managers, introducing financial-ratio analysis, developing the concepts of the cash cycle and working-capital management, and motivating the use of financial models.