Develop the projected annual financial statements for Lowe's that fully assess and evaluate the impact of your proposed strategy.

When you are completing the Individual Case Analysis 2 (ICA2) that is due during Module/Week 7 (by July 4th), please remember that the fifth question/item requirement is to prepare projected financial statements. The projected financial statements present the forecast financial impact of your strategies to Lowes over the period that your strategies will be implemented.

Number of Years Projected

The number of years for your projected financial statements are your judgment but should be consistent with your strategies. For example, if your strategies require five years to fully implement before the desired results are fully realized, then your financial statements should reflect how your strategy affects the two primary financial statements:

Balance Sheet (see Exhibit 5, page 457) including assets (e.g., cash, investments, inventory, pre-paid taxes, property); liabilities (e.g., short and long term debt, accounts payable, deferred compensation and benefits, deferred revenue, deferred income taxes); and stockholders equity (e.g., stock, retained earnings).

Income Statement (see Exhibit 4, page 456) revenue (e.g., net sales, cost of sales, gross margin); expenses (selling-general and administrative costs, depreciation, interest expense); and pre-tax earnings, net income, and cash dividends per share.

Preparing Projected Financial Statements

You probably remember reviewing, analyzing, and preparing financial statements in other business courses throughout your program, including your finance course. This incorporates not only the material learned so far this term in this course, since BUSI 400 is the capstone course, it also incorporates prior knowledge and cumulative learning from the entire business program. If you need a refresher for preparing financial statements, please refer to Chapter 8 of the textbook (pages 260-267), which include the steps for developing projected financial statements and has examples for you to review. The Chapter 8 PowerPoint slides 32-34 also have information that will be helpful when completing this exercise.

Develop the projected financial statements that fully assess and evaluate the impact of your proposed strategy.

TIPS:

Discuss your financial plan for achieving the recommended strategies. Balance sheet

How will your recommended strategies be funding? Cash, debt, shareholders dividends?

How will assets, liabilities, and shareholders equity be affected by your strategies?

Income Statement

How will your recommended strategies affect revenue? When will revenues increase?

What expenses are involved to implement your recommended strategies? When will these costs be incurred? When will these costs decrease or no longer be required?

Financial ratios: You may need to calculate ratios to project financial data for future years.

Use the projected balance sheet and income statement data in the textbook.

You may use the downloadable template provided on the strategyclub.com website, but will need to add the data from the Lowes financial statements in the textbook.

See Chapter 8, pages 260-267), for information about how to project financial statements and the Chapter 8 PowerPoint slides 32-34.

Use the resources in the Collaboration and Community Center forum of the Discussion Board regarding projecting financial statements.

Financial Plan Narrative

Tip: In this section discuss the assumptions using the tips at the beginning of this section as a general guide. This narrative will be presented in your projected financial statements.

Projected Balance Sheet (Insert projected balance sheet here)

Tip: Balance Sheet (see Exhibit 5, page 457) including assets (e.g., cash, investments, inventory, pre-paid taxes, property); liabilities (e.g., short and long term debt, accounts payable, deferred compensation and benefits, deferred revenue, deferred income taxes); and stockholders equity (e.g., stock, retained earnings).

Projected Income Statement (Insert projected income statement here)

Tip: Income Statement (see Exhibit 4, page 456) revenue (e.g., net sales, cost of sales, gross margin); expenses (selling-general and administrative costs, depreciation, interest expense); and pre-tax earnings, net income, and cash dividends per share.