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Professor Lai MGMT 497
. it is not a strict limit and you can exceed it if needed.Some General Instructions Given in the Course Syllabus Follow the general format outlined in Section 18 on page 10: Title page Table of content Introduction (5% of the total score) Organization (5% of the total score) Objectives (10% of the total score) Strategies (20% of the total score) Sales forecasts (20% of the total score) Production plan (10% of the total score) Pro forma financial statements (25% of the total score) Appendix Normally. the descriptive written part (not including graphs. and other illustrations) is about 20-40 pages long. tables. Nonetheless.
Turn in the business plan to your instructor. This handout provides specific examples on how some of the required data may be presented. Download the “Notes on Data Preparation for the Two-Year Plan” from our class website (www.edu/faculty/klai/CL497-2.Supplementary Handouts The checklist given out in class gives you a general picture of the different types of data you will need to prepare for your business plan.htm). Do not drop it off at the management department office! .calstatela.
and completeness of the analysis and not on the ultimate accuracy of its predictions compared to actual values. .Data Period Covered To prepare the business plan. Based on forecasts and projections. depth. you should have all the data from both company and industry reports up to Year 4 Qtr 4. your plan will need to present the company's expected financial position and results of operations in Years 5 and 6. You should not use any actual data from Year 5 even though they become available before completing the plan. Your plan will be graded based on whether the financial numbers are properly prepared and on the coherence.
Strategy Evaluation Forecasting the company’s future profitability under the proposed strategic plan. Two key elements: Capital Budgeting Estimating the short-term (operating) need for cash. and considering alternative funding possibilities. This aims at assessing the company’s ability to meet its goals and objectives. Alternative management strategies may be considered in the plan.Purpose of a Financial Plan The general purpose of a financial plan is to focus the company on future operations against some measurable and achievable targets set by management. forecasting the need of long-term (strategic) financing. . This aims at evaluating whether the company has adequate financial resources to support its action plan.
Title Page and Table of Content Title page: Company Name World number and team number Names of team members Date Name of your professor Table of content: Heading and page number for each section Title and page numbers of every exhibit Do the same for the appendix .
Introduction Provide a concise. interesting introduction of your company: Company name Company history Corporate philosophy Product lines and their target markets Geographic markets served Industry conditions Historical performance Provide an overview of your business plan and its purpose. .
centralization vs.Organizational Structure Describe the organizational structure of your company. You may also talk about the company’s management style.g. decentralization. Present an organization chart that includes every member of the management team. and organizational flexibility). Justify your choice of organizational structure by identifying its potential benefits and drawbacks (e.. . No fictitious resumes. Specify the job duties of each individual member.
SP. . The assigned weights quantified the relative importance of the 6 different performance criteria for your company. you will provide graphs to show the performance of your company relative to others in the industry over Years 3 and 4. MS. and TNI measures. ROE. ROE. UPC. and TNI for both Year 5 and Year 6. SP. MS. These should all be reasonable targets to reach. After reviewing your company’s recent performance. you need to set specific numerical performance targets for ROA. UPC. Discuss why your company chose the weighting values as it did. You should also outline any broad approaches that can help your company achieve individual performance targets. Preliminary and Final Weighting factors: Provide a table showing the values of both Preliminary and Final weighting factors your company chose.Objectives In terms of the ROA.
Discuss in what way these functional strategies and the planned actions can help the company meet individual performance targets. Outline a general strategic plan to compete in the industry.Strategies Provide a mission statement for the company. Provide quarterly cost estimates for all these planned actions. Many of the planned decision actions will incur extra costs. where relevant. Describe specific or generic business strategies employed by the company to create and maintain a competitive advantage. . Present relevant quarterly decision numbers as well. Implementing your functional strategies can cost money. Detail specific functional strategies with quantified action plans for Years 5 and 6.
Think about Decision Variables .For Functional Strategies.
inventory control. stock issuance or buybacks. and dividends to stockholders. Your strategic plan should include quarterly numbers planned for all these decision variables in Years 5 and 6. work shifts. production management (operating lines and hours. product development schedule. compensations (base salaries and commissions). general and other selling expenses. and equipment purchases). and product supply and distribution. employee training. and product pricing. plant and sales office operations. . Financial Management Bank loans. bond issuance or repurchase.List of Functional Strategies Decision variables can be classified into several functional areas: Marketing Sales force size management. CDs. advertising spending. Operations and Production Management R&D spending.
. Report the regression results from estimating the forecasting model using Excel for each market area.Sales Forecasts Present industry sales forecasts for Years 5 and 6: Both in units and in dollars By marker area and with consolidated totals By quarter and with annual totals Present company sales forecasts for years 5 and 6: Both in units and in dollars By marker area and with consolidated totals By quarter and with annual totals Discuss how the quarterly forecasts were generated and show the forecasting model equation used for each market area. Explain also how the forecasting model was selected in each case.
Provide quarterly estimates of all production-related costs (including labor costs. State the safety stock assumption made in developing the plan. . maintenance costs. Quarterly projections showing the expected results of the company’s production and inventory management plan – including units of production. and plant and equipment depreciation charges) in both unit and total costs.Production Plan Establish a quarterly production plan for Years 5 and 6. layoff expenses. anticipated sales. This two-year plan should consist of two parts: Quarterly production schedules showing the expected changes in capacity and its utilization – including production lines. and operating hours per shift – by plant and with totals in Years 5 and 6. work shifts. materials costs. and changes in inventory levels – by market area and with totals in Years 5 and 6.
Present income statements. and balance sheets (both quarterly and annual) by market area and in consolidated totals. Conduct pro forma analysis: Evaluate the company’s future profitability and its ability to meet the performance targets in Years 5 and 6. These pro forma statements will offer projections of the financial outcomes of the company decisions. cash flow statements. . Show any additional computation that is needed.Quarterly and Annual Financial Statements State all the assumptions made in computing pro forma numbers for Years 5 and 6. Show also how depreciation charges for plant and equipment are determined. Year 3 Q1 to Year 4 Q4 (data based on actuals) Year 5 Q1 to Year 6 Q1 (data requiring future projections) Download and follow the sample format for financial statements Chapter 10 of the Player’s Manual discusses how pro forma financial statements are prepared.
Work Hard and Deliver! Teamwork is important. .