What can be added to the companys profitability


Homework: 24-Month Pro Forma

Overview

Creativity and diversity can lead to outcomes that both maximize profit and enhance social well-being. Business leaders use measurable factors to help determine design and development decisions, "go" or "no-go" milestones, financial models, and many "what if" scenarios. In this process, the new product or service is considered as part of a system.

Scenario

You rocked your BMC and received a great response from the experienced project manager (PM). As you read the feedback, you realize that it's now time to develop the financial component. In the comments, the PM also stated that no matter how good an idea is, to senior management, it's a "no-go" if the new product or service does not produce sales.

In preparation for your funding pitch, which you will submit as your course project in Module Seven, the PM also warns that funding pitches are quick and decisive. Including too much information could overwhelm senior management, cause more questions, and erode the purpose of the funding pitch.

Prompt

The PM's directive at this point is for you to develop a 24-month pro forma that demonstrates the potential profitability of the new product or service in an income statement. You will use the Module Six Homework Template linked in the Guidelines for Submission section to complete this homework.

You may use the current company's income statement to project what can be added to the company's profitability. This can be found in the company's 10-K. Look to other companies in the marketplace with products or services similar to the one you are proposing as a basis for your projections. Additionally, you may use the company's current year numbers and key assumptions based on your analysis of the market to project into the future. Remember, these numbers are purely speculative.

In the template, you will specifically address the following:

o Previous fiscal year: Identify historical information for the previous fiscal year.
o 24-month projections: Speculate projections for 24 months.
o Explanation of assumptions: Explain how you were able to speculate appropriate assumptions.

Format your homework according to the following formatting requirements:

o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.

o The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.

o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.

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Corporate Finance: What can be added to the companys profitability
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