The CEO of a U.S. electronics firm is prepared to assess the financial forecasts and financing plan of the Chief Financial Officer. Given the cyclical nature of the industry and the volatility of the company’s performance, the CEO has doubts about the usefulness of predictions on linear extrapolation of rapid sales growth and stable relations of profits and wealth of sales. The course objectives are: 1) how many years into the future the forecasts should run the height of the given u … Read more »

The CEO of a U.S. electronics firm is prepared to assess the financial forecasts and financing plan of the Chief Financial Officer. Given the cyclical nature of the industry and the volatility of the company’s performance, the CEO has doubts about the usefulness of predictions on linear extrapolation of rapid sales growth and stable relations of profits and wealth of sales. The course objectives are: 1) how many years into the future the forecasts should run in the face of uncertainty, 2) how can one deal with the high uncertainty in the preparation of forecasts or the design of a financial plan, and 3) as estimated funding needs under the conditions of adversity.
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Thomas R. Piper
Source: Harvard Business School
8 pages.
Release Date: 02 February, 1989. Prod #: 289040-PDF-ENG
Science and Technology Co. – 1985 HBR case solution