3 Years Financial Projection on Anthem Inc (Health Insurance Company)
For Milestone, you need to make 3-year projection of the target company's income statement (P&L). Here is an example of a full-blown P&L.
Revenue
Expense:
Compensation and Benefits
Supplies
Marketing
SG&A
R&D
Other Expense
Total Expenses
Net Income / (Loss)
The 3-year projection should start with assumption, such as revenue growth rate at 5% or 10% per year. Expense increase or reduction over the years, etc.
As long as the assumptions are reasonable, the forecast / projection should be fine.
Guidelines
In this report, you will discuss factors that may affect current and future performance of the chosen company. Based on what you know about the organization's financial health and performance, you will then forecast future performance of the company for each of the next three years.
Prompt: After having evaluated the company's financial health, you should research and assess the company's strategic priorities and behavior. You should investigate internal risks and non-monetary factors that may affect current and future performance and decisions. To justify your findings and projections, you will need to produce accurate and relevant data tables, explaining how the numbers were informed by existing information and modeling different scenarios.
1. Success Factors and Risks. Use this section to discuss the factors that may affect current and future performance. Specifically:
A. How do the organization's financial and strategic priorities affect accounting procedures and business decisions? How might that affect business success? For example, is management growth-oriented or efficiency-oriented? What is the organization's approach to risk and short- versus long-term planning horizons?
B. How might the organization better capitalize on non-financial factors such as market share, reputation, human resources, physical facilities, or patents? Support your response with relevant research and analysis.
C. What are the most significant internal risks to the company's financial performance? Give evidence to support your response. For example, is the company vulnerable to technological changes or cyber-attacks? Loss of high-talent personnel? Production disruptions?
2. Projections. Based on what you know about the organization's financial health and performance, forecast its future performance. In particular, you should:
A. Project the organization's likely consolidated financial performance for each of the next three years. Support your analysis with an appendix spreadsheet showing actual results for the most recent year, along with your projections and assumptions. Remember, your supervisor is interested in fresh perspectives, so you should not just replicate existing financial statements, but should add other relevant calculations or disaggregations to help inform decisions.
B. Modify your projections for the coming year to show a best- and worst-case scenario, based on the potential success factors and risks you identified. As with your initial projections, support your analysis with an appendix spreadsheet, specifying your assumptions and including relevant calculations and disaggregations beyond those in existing financial reports.
C. Discuss how your assumptions, forecasting methodology, and information gaps affect your projections. Why are your projections appropriate?
For example, are they consistent with the organization's mission and priorities? Aggressive but achievable? How would changing your assumptions change your projections?