Success Factors, Risk, and Projections of Kroger
Prompt: Research and assess Kroger grocery store’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.
Success Factors and Risks. Use this section to discuss the factors that may affect current and future performance. Specifically:
- 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?
- 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.
- 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?
Projections. Based on what you know about the organization’s financial health and performance, forecast its future performance. In particular, you should:
- 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.
- 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.
- 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?
Your Success Factors, Risk, and Projections report should be approximately 8-10 pages long (excluding title page, spreadsheets and graphs, and references list). It should be double spaced, with 12-point Times New Roman font and one-inch margins, and should use the latest guidelines for APA formatting for references and citations.
Focus on Income Statement (or Profit and Loss, or P&L) only on the forecast.
You need to download the most recent annual P&L in the Excel, then project forward into next 3 years.
For forecast, you need make assumptions on sales growth, change in headcount which impacts salaries / benefits, other operating cost increase (or cost reduction). You would use the current year financials as your base platform, and make changes or projection from there.