Solarcity: Balanced Scorecard And Activity Plan Paper

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Strategic Implementation Balanced Scorecard / Activity Plans The Balanced Scorecard will demonstrate what SolarCity will need to do, in order to save while expanding. Appendix 1 will give you an insight of what SolarCity will need to learn from its competitors and potential ideas they can integrate into the company. Internally, SolarCity can look to outsource which will reduce costs. Externally, incentive programs can be implemented to have an increase for customers and investors. Finally, financially SolarCity will have an increase of profits, due to outsourcing. Financial Statements: Our company did a three year financial analysis using the last three years as a baseline to determine future financial performance. There are several crucial …show more content…

We believe this to be a reasonable assumption especially given 2014’s 200% increase when compared to 2013. We used historical sales/customer ratio to determine sales for 2015 onwards. Our research indicates that R&D expenditures in 2015 will nearly double compared to 2014. From 2016 onwards, we assumed a 50% reduction in R&D expenditures. We used historical COGS/new customer ratio to determine COGS for 2015. Effective 2016, we expect to the see the annual COGS rate to decrease 15% though outsourced manufacturing and procuring efficiencies made to SolarCity’s supply chain. We used historical SG&A/new customer ratio to determine SG&A for 2015. Effective 2016, we expect to the see the annual SG&A rate to decrease 20% YOY due to the elimination of this certain in-house activities tied to operations and installations. For the outsourced workforce, we used SG&A rates half of those incurred in-house. Interest expense we used the historical average of 15% EBIT. Income taxes will remain constant with most recent year (MRY) with the expectation that for those years in which operating losses are incurred, the company will use negative income taxes as tax credits for future reporting …show more content…

Again, this assumption is driven mostly from continued growth. JIT process implementation with regards to manufacturing will help curb large increases to inventory as seen in 2014 when compared to 2013 (nearly 200%). We assume inventory growth will be more predictable with YOY increases of 45%. Long term investments we expect YOY increases of 20%. For property, plant, and equipment, we expect YOY increases of 10% (a much slower rate of growth when compared to previous years). We expect SolarCity to drastically lower its acquisition intensity. For intangible assets, we expect YOY increases of 20% that stem from unique solar patents coupled with this company’s unique scalability. We expect current liabilities to increase by 17.7% (blended) in 2015. Then a meager 7% increase for each subsequent year. Long term prognosis ( > 10 years) we expect the amount in current liabilities to flatten out and/or decrease as the firm leverages its operating profit (from 2017 onwards) to pay down current liabilities. Corporate Strategy: Related Diversification Multidivisional

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