Capital City Corporation: A Case Study in Financial Analysis and Forecasting for Shareholder Value Creation

Abstract

A firm's senior management team must reach a consensus regarding key strategic decisions available to the company. A comprehensive financial analysis of the firm's past performance and future prospects is necessary to determine the best-course of action for the firm. Most of the conceptual and analytical material covered in a one-semester Financial Management class are used to quantitatively justify the final decision. the case specifically highlights the need to extend management's evaluation horizon when making long-term strategic decisions. Another innovative aspect of the case is the use of the MSN Money Central financial statement formats, which means the required spreadsheet models can be used to perform the same financial analysis and financial statement forecast on any publicly-traded company. The conceptual complexity and extensive spreadsheet modeling required to solve the case make it an appropriate term project for undergraduate seniors or MBAs.