Case | HBS Case Collection | 1991 (Revised from original version)
by Thomas R. Piper
The CEO of a U.S. electronics firm is assessing the financial forecasts and the financing plan prepared by the chief financial officer. Given the cyclicality of the industry and the volatility of the firm's performance, the CEO is unsure as to the usefulness of forecasts based on straight line extrapolation of rapid sales growth and stable relationships of profits and assets to sales. The teaching objectives include: 1) how many years into the future should the forecasts run given the level of uncertainty, 2) how can one deal with the high uncertainty when preparing the forecasts or designing a financing plan, and 3) how to estimate the financing needs under conditions of adversity.
Keywords: History; Risk and Uncertainty; Groups and Teams; Industry Growth; Sales; Change Management; Business Plan; Financial Condition; Forecasting and Prediction; Profit; Financial Strategy; Volatility; Manufacturing Industry; Electronics Industry; United States;
Citation:
Piper, Thomas R. "Science Technology Co.--1985." Harvard Business School Case 289-040, November 1991. (Revised from original February 1989 version.)
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