Reference no: EM132275732 , Length: word count:1800

Milestone Assignment -

Overview: You now know how to evaluate the equity of a company and analyze the market economy's behavior. Using this knowledge, you will predict your company's future behavior through forecasting, identify and describe business opportunities that the company should pursue, and explain the benefits and costs of these decisions.

Prompt: In this milestone, you have two tasks. First, predict your company's future behavior through forecasting, projecting its likely performance based on the most recent year of financial information. Then, explain the incremental impact of a hypothetical but reasonable and simple new investment project, such as a new product or facility or a cost-cutting investment, as an initial step in thinking about the future. To justify your findings and projections, you need to include accurate and relevant data tables that explain how the numbers were informed by existing information and model different scenarios. Be sure to address the following critical elements:

Projections: Using what you know about the company's financial health and performance, forecast its future performance. In particular, you should:

A. Project the company's likely consolidated financial performance for each of the next three years. Support your analysis with an appendix spreadsheet showing actual results for the most recent year, along with your projections and assumptions. Remember that your supervisor is interested in fresh perspectives, so you should not just replicate existing financial statements: You should add other relevant calculations or dis-aggregations to help inform decisions.

B. Modify your projections for the coming year to show a best- and worst-case scenario based on the potential success factors and risks you identified. As with your initial projections, support your analysis with an appendix spreadsheet, specifying your assumptions and including relevant calculations and disaggregations beyond those in the existing financial reports.

C. Discuss how your assumptions, forecasting methodology, and information gaps affect your projections. Why are your projections appropriate? For example, are they consistent with the company's mission and priorities? Aggressive but achievable? How would changing your assumptions change your projections?

Instructions - One word document with the 3 individual rubric items labeled, then answered including

• a regular set of projections (most likely scenario) for each of next 3 years, income statement only
• a best case set of projections for each of next 3 years, income statement only
• a worst case set of projections for each of next 3 years, income statement only

Each section should include a short narrative about how you came up with the projections and any relevant explanations, such as cost of goods sold expected to remain constant vs sales, or assumes that merger with XYZ will be completed 6/30/2020.

You might also include a single excel file attached (two files total) that shows me your backup, with a tab for each regular, worst case, best case. The income statement should include at least: sales, operating expenses (cost of sales might be separately show), operating income, other expense/revenue, taxable income, net income. Earnings per share are not required.