Reference no: EM133078141

FIN470 Case Studies in Finance Forecasting - American University of the Middle East

Learning Outcome 1: Apply financial forecasting methods to a given situation

Learning Outcome 2: Be able optimally allocate the resources as per the company needs

Learning Outcome 3: Propose solutions for real life finance situations.

Learning Outcome 4: Demonstrate the ability to communicate their knowledge regarding finance cases' topics

Project Summary (Scenario)

In this project students are expected to prepare the forecasted balance sheet and income statement of the company chosen. Aligning with this goal, each group of the students will select a company from the list provided in Appendix 1. For the selected company, last 5 year (for example 2014, 2015, 2016, 2017, 2018) balance sheets and income statements will be downloaded. Forecasts, however, will be projected for last year only (that is 2018 in this example). Based on the information contained in financial statements, students will utilize two different forecasting methods specified below, and they will compare the efficacy of each model in projecting the best forecast by comparing the forecasted data with the actual data.

Corresponding forecast methods are as follows:
- Percentage of Net Sales (will be used only with last year)
- Regression Analysis (will be used with last 5 year)

In order to project the forecast, students will calculate geometric average growth rate in Net sales which shall be used in the above given models.

Deliverables: Detailed information about the firm chosen which covers company profile, main competitors and market share. In this deliverable students also will calculate the corresponding growth rate.

Students are supposed to implement Percentage of Net Sales method. In Percentage of Net Sales method forecast will be projected only for historical Current Asset, Fixed Asset, Current Liabilities, Long-Term Liabilities and Equity.

The final section of the project covers the regression analysis. As in Percentage of Net Sales method, in regression analysis forecast will be projected only for historical Current Asset, Fixed Asset, Current Liabilities, Long-Term Liabilities and Equity. Following the results of forecasted financial statements, students must discuss the efficiency of each model in forecasting.

Attachment:- Case Studies in Finance Forecasting.rar