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*Alternative strategies (giving advantages and disadvantages for each). There should be at least two alternative strategies identified and discussed.
*Projected Financial Statements (Income Statement, Balance Sheet and Statement of Cash Flows) for 3 years into the future. This must be broken down by year into two (2) columns: 1 column without your strategy and 1 column with your strategy. The without column should serve as the basis for your with strategy column and only those financial statement accounts that will be changed, based on your strategy, should be impacted.
*Include Projected ratios for the without and with strategy by year. Discuss how these ratios compare and contrast with the historical findings.
*Cost Analysis completed on an Excel tab that outlines the cost that will be incurred to implement the strategy. This information should correspond with the With Strategy on the Projected Financial Statements, linking of cells to the financial statements is encouraged.
*Net Present Value analysis of proposed strategy’s new cash flow – you may also use Excel to solve for this. From the income statement the change in operating income between your with and without strategy should serve as your cash inflow for each year.

Respuesta :

Projected financial statements incorporate current trends and expectations to arrive at a financial picture that management believes it can attain as of a future date.

What is projected financial statement?

  • Obtain an unbiased assessment of the financial situation of your firm and the direction it is likely to follow.
  • A balance sheet and income statement at the summary level are the absolute least that should be included in anticipated financial statements.
  • The use of financial predictions enables you to determine what additional resources are required to sustain rising revenue as well as their possible effects on your balance sheet.
  • The predicted financial plan shows how much more debt or equity you'll need to raise in order to maintain financial stability and health, which has an impact on your cash flow.
  • Due to their potential to reveal data about a company's earnings, costs, profitability, and debt, financial statements are crucial. Financial statement line item review for competitive and historical comparisons requires the use of financial ratio analysis.

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