2. Analyze, Forecast, and Interpret Income Statement and Balance Sheet

Following are the income statements and balance sheets of AutoZone Inc.

AUTOZONE INC.
Consolidated Statements of Income
$ thousands						12 Months Ended Aug. 27, 2016
Net Sales						$ 10,635,676
Cost of sales, including warehouse and delivery expenses						$ 5,026,940
Gross profit						$ 5,608,736
Operating, selling, general, and administrative expenses						$ 3,548,341
Operating profit						$ 2,060,395
Interest expense, net						$ 147,681
Income before income taxes						$ 1,912,714
Income tax expense						$ 671,707
Net income						$ 1,241,007

Forecast AutoZones 2017 income statement and balance sheet using the following relations ($ in thousands). All percentages (other than sales growth and provision for income taxes) are based on percent of net sales.

Net Sales growth					6%
Cost of sales, including warehouse and delivery expenses					47.30%
Operating, selling, general and administrative expenses					33.40%
Interest expense, net					$145,000
Income tax expense (% pretax income)					35%
Accounts receivable					2.70%
Merchandise inventories					34.10%
Other current assets					1.20%
Accounts payable					38.50%
Accrued expenses and other					5.20%
Income taxes payable					0.40%

CAPEX for 2017 will be 4.6% of 2017 Net sales and depreciation will be 8.3% of Property and equipment, net at the start of the fiscal year, which was $3,733,254 thousand.

AUTOZONE INC.
Consolidated Statements of Income
$ thousands, except for par value										Aug. 27, 2016
Current assets
Cash and cash equivalent										$ 189,734
Accounts receivable										$ 287,680
Merchandise inventories										$ 3,631,916
Other current assets										$ 130,243
Total current assets										$ 4,239,573
Property and equipment, net										$ 3,733,254
Goodwill										$ 391,887
Deferred income taxes										$ 36,855
Other long-term assets										$ 198,218
Total assets										$ 8,599,787
Current liabilities
Accounts payable										$ 4,095,854
Accrued expenses and other										$ 551,625
Income taxes payable										$ 42,841
Total current liabilities										$ 4,690,320
Long-term debt										$ 4,924,119
Deferred income taxes										$ 284,500
Other long-term liabilities										$ 488,386
Stockholders' deficit
Preferred stock, authorized 1,000 shares; no shares issued
Common stock, par value $0.01 per share, authorized 200,000 shares;
30,329 share issued and 29,118 shares outstanding in 2016 and 32,098 shares issued
and 30,659 shares outstanding in 2015										$ 303
Additional paid-in capital										$ 1,054,647
Retained deficit										($1,602,186)
Accumulated other comprehensive loss										($ 307,529)
Treasury stock, at cost										($ 932,773)
Total stockholders' deficit										($1,787,538)
Liabilities and stockholders' deficit										$ 8,599,787

Goodwill, Deferred income taxes, Other long-term liabilities, AOCI, and Treasury stock will not change during the year.

Other long-term assets including intangible assets. The 10-K reports that the 2017 amortization expense for intangibles will be $8,482 thousand.

Long-term debt will decrease by $1,597,500 in 2017, per the 10-K.