1. HouseholdCo, a large household products firm, recently reported $6.2 billion in accrued and other liabilities and $49.o billion in revenues, such that accrued and other liabilities equaled 12.6 percent of revenues. Using data from the annual report's footnote 4, provided in Exhibit 11.15, discuss why a forecast ratio of 12.6 percent going forward would distort your forecast of free cash flow. How should the balance sheet be reorganized to prevent this? EXHIBIT 11.15 HouseholdCo: Annual Report Note 4- Supplemental financial information Selected components of current and noncurent liabilities were as follows: $ million Accrued and other liabilities-current Year 1 Marketing and promotion Compensation expenses Accrued ShaveCo exit costs Taxes payable Other Total 2,833.0 1,846.0 456.0 922.0 102.0 6,159.0 Results from severance costs due to acquisition of ShaveCo, a consumer products firm, in prior year 1. HouseholdCo, a large household products firm, recently reported $6.2 billion in accrued and other liabilities and $49.o billion in revenues, such that accrued and other liabilities equaled 12.6 percent of revenues. Using data from the annual report's footnote 4, provided in Exhibit 11.15, discuss why a forecast ratio of 12.6 percent going forward would distort your forecast of free cash flow. How should the balance sheet be reorganized to prevent this? EXHIBIT 11.15 HouseholdCo: Annual Report Note 4- Supplemental financial information Selected components of current and noncurent liabilities were as follows: $ million Accrued and other liabilities-current Year 1 Marketing and promotion Compensation expenses Accrued ShaveCo exit costs Taxes payable Other Total 2,833.0 1,846.0 456.0 922.0 102.0 6,159.0 Results from severance costs due to acquisition of ShaveCo, a consumer products firm, in prior year