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SNYDER GARDENS, INC. Snyder Gardens was founded in $1997$ when Benjamin Snyder quit his job as landscape designer for

the well$-$known Dallas landscaping firm Rogers & Co$.$ to start his own independent company. Starting

with only a handful of customers, no personnel and a used pickup truck, Benjamin Snyder slowly built

up an enviable reputation as a very creative, high$-$quality landscaping architect catering to the upscale

Park Cities neighborhood in Dallas, Texas. His low overhead, unusual floral creations and superb

reputation for customer service allowed him to carve out a profitable niche in the highly competitive

Dallas landscaping market.

Over the years, as business outgrew the capabilities of one single person, Benjamin Snyder started

hiring landscaping personnel to help him meet customer demand. Additional trucks were bought to

support a promising lawn maintenance operation, and in $2006,$ Snyder started his own nursery to

maintain better quality control over the bulbs, flowers, trees and other landscaping supplies needed

in his business. The nursery sold landscaping supplies mainly to Snyder's longtime clients, who hired

him for both the plants as well as the creative process of designing the yard and the labor to do the

actual planting. Lately, the nursery had also started catering to individuals who wished to do their

own yard work and simply walked in to buy plants and bulbs.

Diversifying into the growing and selling of plants and flowers required the acquisition of a small

office building surrounded by sufficient land to develop the nursery. Because of the substantial

capital requirements that far exceeded his own assets, Snyder incorporated his business and raised

the necessary capital from various relatives and friends who were given equity participation in the

enterprise. Temporary funds for operations were generated by the company's internally generated

cash flow $($Snyder Gardens had never paid dividends$),$ and were supplemented by a line of credit

provided by First Intertown Bancorp, Ben Snyder's longtime bank.

Recently, however, Ben Snyder's relationship with his banker had deteriorated. His line of credit,

initially set at $$250,000,$ had rapidly been exhausted, and Snyder had had to ask several extensions

of the loan. Because of his excellent payment history, the bank's commercial loan officer had initially

met Snyder's request with little fuss. Subsequent requests by Snyder to raise the loan limit had not

been so enthusiastically received, however. While Snyder's most recent request to raise the credit

limit to $$825,000$ had ultimately been approved, the process had been painful. The bank's loan

officer had initially turned down Snyder's request, and it had taken a direct appeal to the bank's

senior vice$-$president $($who occasionally played golf with Snyder$)$ to get the loan approved. Even then,

the vice$-$president had been rather cool and insisted that his bank would not allow Snyder to exceed

this final limit of $$825,000.$ While happy to have secured the financing he so desperately needed,

Snyder did not understand the bank's position. After all, his company was consistently profitable, as

he had taken pains to explain to the bank, and he felt that he was not getting a fair deal.

$\backslash$table$[[$INCOME STATEMENT,$2007,2006,2005],[$Net Sales,$6,271,500,4,666,400,3,917,100],[-$Cost of Goods Sold,$-4,501,200,-3,316,500,-2,813,700],[=$Gross Profit,$1,770,300,1,349,900,1,103,400],[-$Operating Expenses,$-1,513,000,-1,143,500,-980,100],[-$Depreciation,$-37,000,-33,500,-30,000],[-$Interest Expenses,$-57,650,-42,822,-32,844],[=$Pretax Profit,$162,650,130,078,60,456],[-$Taxes paid,$-56,927,-45,527,-21,160],[=$Net Income,$105,722,84,550,39,296],[$ASSETS$,2007,2006,2005],[$Cash$,95,700,141,900,135,300],[$Accounts Receivable,$745,600,511,500,396,000],[$Inventory$,969,600,785,400,551,100],[$Current$,1,810,900,1,438,800,1,082,400],[$Property$,$ Gross,$548,900,446,900,387,600],[-$accumulated Depreciation,$-160,500,-123,500,-90,000],[$Net Property,$388,400,323,400,297,600],[$Total Assets,$2,199,300,1,762,200,1,380,000],[$LIABILITIES & NET WORTH,$2007,2006,2005],[$Bank Debt,$743,577,526,750,379,200],[$Accounts Payable,$561,750,442,200,287,100],[$Long Term Debt,$80,000,85,000,90,000],[$Total Debt,$1,385,327,1,053,950,756,300],[$Net Worth,$813,973,708,250,623,700],[$Tot Liab $+$ Net Worth,$2,199,300,1,762,200,1,380,000]]$ Create a one page write$-$up Calculate$/$report at least $4-6$ financial statement ratios $($over time$)$ that you believe will best help you assess the performance and health of Snyder Gardens.

Do you believe Snyder Gardens is doing well or poorly?

What is Snyder Garden$$s main concern $($hint: the fact that they seem to be running out of cash$),$ and what do you believe is the driving force for that concern?

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