CASE STUDY: PROJECTIONS, NPV, COMPILATION ASSIGNMENT

BUSI 690

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CASE STUDY: PROJECTIONS, NPV, COMPILATION ASSIGNMENT INSTRUCTIONS

OVERVIEW

Continue working on the individual case study started in Case Study 1: Matrices Assignment

of ABC Corporation. Complete this portion of the case study: Case Study 3: Projections, NPV,

Compilation Assignment (3rd and final assignment).

A formal, in-depth case study analysis requires you to utilize the entire strategic management

process. Assume your group is a consulting team asked by the ABC Corporation to analyze its

external/internal environment and make strategic recommendations. You must include exhibits

to support your analysis and recommendations.

INSTRUCTIONS

The completed case study must include these components, with portions to be submitted over

several modules as the Case Study 1: Matrices Assignment, the Case Study 2: Historical

Financial Analysis Assignment, and the Case Study 3: Projections, NPV, Compilation

Assignment.

• Cover page (must include the company name, your name, the date of submission, and a references page; the document must follow current APA guidelines)

• A total of 12 - 15 pages (for all there parts, combined) of narrative text, this does not include the financial statements, reference pages, or matrices

• Reference page (follow current APA guidelines)

• Historical Financial Statements, Proforma Financial Statements, NPV Calculations and a Cost Sheet for the strategy in an Excel document

• Matrices, which must be exhibits/attachments in the appendix and not part of the body of the analysis (The Strategy Club has excellent templates/examples for exhibits and

matrices).

You will use the information completed in Case Study 1: Matrices, and

Case Study 2: Historical Financial Analysis as part of your Case Study 3: Projections, NPV,

Compilation Assignment final document. Be sure to make any corrections to Part One and Part

Two based on feedback given on each of the assignments.

Your Case Study 3: Projections, NPV, Compilation Assignment paper must include:

Case Study 1: 1-7

1. Executive Summary – this should be no more than one page and provide the reader with an overview of what will be contained in the following pages. The problem and

strategic solution being recommended should be in this summary.

2. Existing mission, objectives, and strategies 3. A new mission statement (include the number of the component in parenthesis

before addressing that component)

4. Analysis of the firm’s existing business model 5. SWOT Analysis 6. TOWS Matrix 7. Competitive forces analysis

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Case Study 2: 8-10

8. Historical Financial Statements (Income Statement, Balance Sheet, and Statement of Cash Flows) from the 3 most current years for the firm

9. Historical Ratio Analysis 10. Competitors Ratio Analysis

Note from student: Parts 1-10 are already completed as they were part of case

study’s 1 and 2. These parts are being uploaded to show what was previously done in

order to complete part 3 accurately. Requesting assistance with part 3 only (highlight

in yellow).

Case Study 3: 11-18

11. Alternative strategies (giving advantages and disadvantages for each). There should be at least two alternative strategies identified and discussed.

12. 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.

13. Include Projected ratios for the without and with strategy by year. Discuss how these ratios compare and contrast with the historical findings.

14. 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.

15. 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.

NOTE: To construct the first cash flow (cf1) the new revenue from your strategy(s) must

be discounted back to the present value by calculating EBIT (Operating Income on the

Income Statement) and that figure will be your cfn for each year. cf0 (initial cost of your

strategy), cf1 (discounted cash flow first year), r (opportunity cost of capital, the rate of

the next best alternative use of cash/debt/equity resources).

a. 𝑁𝑃𝑉 = −𝑐𝑓0 + 𝑐𝑓1

(1+𝑟)1 +

𝑐𝑓2 (1+𝑟)2

+ 𝑐𝑓3

(1+𝑟)3 …

𝑐𝑓𝑛 (1+𝑟)𝑛

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16. Implementation strategy – how and when will the strategy be implemented, this should outline the who, how, what, and when of the implementation process.

17. Specific recommended strategy and long term objectives Explain why you chose the strategy, discuss the advantages/benefits to

organizational success and sustainability. Incude a discussion of the challenges or

disadvantages that may arise as a result of the strategic choice.

18. Text must accompany all data for each section explaining the information on the spreadsheet that was calculated. This will be completed in current APA level for

each component.

Place the results of the case study analysis in a Word document include matrices as appendices

and a reference page. Submit a separate Excel document for your Historical financials,

Projections, NPV, and Cost of the strategy.