2 #2 Refine Assumptions for PPE Forecast

Following are the income statement and balance sheet for Medtronic PLC.

Medtronic PLC
Consolidated Statement of Income For Fiscal Year Ended
$ millions	April 26, 2019
Net sales	$36,668
Costs and expenses
Cost of products sold	10,986
Research and development expense	2,796
Selling, general, and administrative expense	12,502
Amortization of intangible assets	2,117
Restructuring charges, net	238
Certain litigation charges, net	199
Other operating expense, net	310
Operating profit	7,520
Other nonoperating income, net	(448)
Interest expense	1,733
Income before income taxes	6,235
Income tax provision	656
Net income	5,579
Net income loss attributable to noncontrolling interests	(23)
Net income attributable to Medtronic	$5,556

Medtronic PLC
Consolidated Balance Sheet
$ millions	April 26, 2019
Current assets
Cash and cash equivalents	$5,272
Investments	6,546
Accounts receivable, net	7,466
Inventories, net	4,504
Other current assets	2,573
Total current assets	26,361
Property, plant, and equipment, net	5,610
Goodwill	47,951
Other intangible assets, net	24,672
Tax assets	1,823
Other assets	1,217
Total assets	$107,634
Current liabilities
Current debt obligations	$1,006
Accounts payable	2,344
Accrued compensation	2,627
Accrued income taxes	680
Other accrued expenses	3,510
Total current liabilities	10,167
Long-term debt	29,383
Accrued compensation and retirement benefits	1,981
Accrued income taxes	3,406
Deferred tax liabilities	1,534
Other liabilities	908
Total liabilities	47,379
Shareholders equity
Ordinary shares	0
Additional paid-in capital	31,839
Retained earnings	31,524
Accumulated other comprehensive loss	(3,253)
Total shareholders equity	60,110
Noncontrolling interests	145
Total equity	60,255
Total liabilities and equity	$107,634

Note: Complete the entire question in Excel using the following template: Excel Template. Format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places.

a. Use the financial statements along with the additional information below to forecast property, plant and equipment, net for fiscal year ended April 2020.

	$ millions	April 27, 2018 Actual	April 26, 2019 Actual	April 2020 Forecast
	Net sales	$35,944	$36,668	$33,002
	CAPEX	1,282	1,134
	Depreciation expense	985	895
	Property, plant, and equipment, gross	12,311	10,920
	Property, plant, and equipment, net			Answer

b. Suppose the company discloses in a press release that accompanies its year-end SEC filing that anticipated CAPEX for fiscal year ended April 2020 is as follows.

Company anticipated CAPEX for fiscal year ended April 2020

$1,800

million

Use this guidance to refine your forecast of property, plant and equipment, net for fiscal year ended April 2020.

Property, plant, and equipment, net

Answer

million