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
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 disaggregations 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 yourprojections
appropriate? For example, are they consistent with the company’s mission and priorities? Aggressive but achievable? How would changing
your assumptions change your projections?