1) FUTURE CASH FLOWS:
Prepare a three year forecast of estimated future cash flows for Johnson & Johnson and provide valid economic/business reasons for your projections. This means you would have a statement of incremental cash flows. One year in the future, develop a future market value of equity and an estimated future price per share for the company’s common stock.
Write a 1 page analysis, that incorporates marketing, accounting, sales, production, management, technology, etc. information into your estimates of future cash flows. Please cite 2-3 media sources for this analysis.
a) Carry out a what-if analysis for the cash flows using at least one of the following: sensitivity analysis, scenario analysis, or simulation analysis. Also, give a written summation of your what-if analysis.
b) Collect and calculate information on inflation estimates and incorporate those estimates, as you see fit, into your cash flow estimates.
c) Comment on how future cash flows maybe affected by the information contained in footnotes to the financial statements. Footnotes are often more interesting than the rest of the financial statements and provide valuable information.
d) Do a short analysis of the competitors, the prospects of their future cash flows, and how that affects your company’s cash flows.
e) Perform a "post-audit" of one (or more) of your company’s most important past projects and incorporate this qualitatively into the estimates of future cash flows
2)HISTORICAL STOCK PRICE:
Review briefly historical performance of company’s stock price. Describe if this affected your analysis.