Pro-Forma Financial Statements

Hand holding credit card, cropped

Client: Leading North American Retailer

Client Situation

A leading retailer of private label and national-brand merchandise, which also had a $30 billion credit card portfolio with 30 million accounts, was considering an initiative for a new product – a co-branded MasterCard targeted at the retailer’s inactive and pure-transactor accounts.  The AddVantage Group was engaged to develop the financial business plan to support the contemplated introduction of this new product, which was anticipated to generate a relatively quick and sizeable lift in their business due to the existing credit relationships.

The initiative included the following challenges:

  • Client staff were not available to provide the dedicated focus and expertise needed
  • Aggressive deadlines that had been established for the project
  • The company’s falling stock price and negative market speculation, due to the lack of other options for topline growth
  • The company’s existing financial models were not capable of providing a thorough analysis of the prospects for the new product

Our Approach

  • Collaborated with project team members to identify roles and responsibilities, confirm the timeline and discuss project goals
  • Along with Finance and Marketing leadership, developed solid assumptions across all parameters for the business plan
  • Reviewed the existing new product evaluation model and information related to the proposed new product’s characteristics
  • Customized, tested and documented all changes to the model including recommendations or suggestions
  • Analyzed and reviewed the model’s results with the project team
  • Performed refinements and sensitivity analysis and document business implications
  • Transitioned to client team to enable ongoing maintenance of the model
  • Developed business plan and supporting detailed financial models


  • A customized new product evaluation model for analyzing the proposed initiative
  • A realistic financial plan where each of the 20+ variable assumptions were evaluated by multiple standards
  • An understanding of the various key drivers and the associated sensitivities to achieving the targeted results
  • Aggressive timelines were achieved despite a client-side delay in starting the project
  • The business plan was successfully implemented by the client
  • The initiative became the largest growth driver for credit card assets, which was the company’s key driver for shareholder value