3. What is your forecast for the 2009 income statement and the 2009 balance sheet? 5. Estimate the degree of operating leverage and degree of
3. What is your forecast for the 2009 income statement and the 2009 balance sheet?
5. Estimate the degree of operating leverage and degree of financial leverage for 2006-2008 and for estimated 2009.
6. How do income and total assets fluctuate with changes in key assumptions?
7. What are the most important variable(s) to use in sensitivity analysis?
8. As a reality check, what 2009 growth rates in Roundup and corn are needed to maintain the 2008 return on assets?
Title Page Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit MONSANTO COMPANY Income Statement in millions of dollars) Years ended August 31 2,006 2.007 Revenue growth 2.008 2009F 2.005 Net Sales Roundup Com Seeds and Traits All Other 5% management forecast 10% management forecast 11% 2008 growth rate 2,049 1.494 2.7321 6,275 3.280 2.995 2.262 1,793 3.0101 7.065 3,6221 3,443 2,568 2.807 2.9741 8,149 4,1191 4,230 4,094 3,542 3,7291 11.365 5,188 6.177 Cost of Goods Sold Gross Profits Selling, General, and Administrative Research & Development Operating Expenses 1.404 8131 2.217 1.604 700 2.304 1.858 9631 2.821 2.312 1.1441 3.456 Net Income from Operations 1.139 1,409 304 -123 312 lis 1331 1101 Other Expenses Interest Expense Income Before Taxes Income Taxes Net Income 2.923 359 1041 255 1,019 330 6 891 1361 1.396 4031 99312 899 .024 Data source: Monsanto Company annual reports, 2005 08. Version A Roundup growth -5% Title Page Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 2 MONSANTO COMPANY Balance Sheet (in millions of dollars) As of August 31 2,006 2.007 2.005 2008 525 1.473 1.664 1.460 1.455 Assets Cash Accounts Receivablea) Inventory Other Current Assets Current Assets 1.688 866 1.578 1.719 1.000 5,163 1.613 2.703 2.453 1.476 8.245 982 5.461 Property. Plant, & Equipment. Net Goodwill Other Long Term Assetsb) Fixed Assets 2,378 2,401 1.156 5,935 2.418 2.751 1.098 6.267 2.656 4,040 1.1241 7.820 3,323 4,663 1.7601 ,746 9 Total Assets 10,5791 11.728 12.983 17.0011 126 2x 270 525 514 649 1,090 208 234 161 Liabilities and Shareholders' Equity Short-Term Debt Accounts Payable Income Taxes Payable Dividends Payable Deferred Revenues Other Accruals Current Liabilities 120 150 26 260 1.650 3,075 1,300 2,159 1,328 2.279 867 2,1651 4,439 Long-Term Debt Other Deferred Revenue Liabilities 1.458 1.249 1.639 1285 1.150 1.255 1.792 2.386 Total Liabilities 4.9661 5.203 86171 Common Stock Treasury Stock Additional Contributed Capital Retained Earnings Shareholders' Equity 9,106 -500 SRR -2.478 5.613 8.879 -1.737 -1.177 9495 1.050 9.374 Total Liabilities and Equity 10.5791 11.72 17.991 (a) Includes some long term receivables b) Largely deferred tones Data Source: Monste r parts, 2005-08 Title Page Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 3 MONSANTO COMPANY Statement of Cash Flows (in millions of dollars) 2008 2,024 527 58 573 (636) 18 Year Ended August 31 2006 2007 Operating Activities Net Income 689 993 Adjustments for Items That Did Not Require(Provide) Cash: Depreciation and Amortization 519 Deferred Taxes Other Long-Term Assets) (26) Changes is Assets and Liabilities That Provided (Required) Cash: Accounts Receivable(a) (123) Inventory (24) Other Current Assets (142) Accounts Payable (11) 135 Income Taxes Payable (84) Dividends Payable Deferred Revenues 140 Other Accruals Other Deferred Revenue/Liabilities (64) Net Cash Provided by Operating Activities 1.538 1,722 (1.125) (734) 1476) 441 124 41 11 36 120 322 (20) 607 515 1.131 2.367 Investing Activities Capital Expenditures Acquisitions Net Cash Required by Investing Activities (370) (539) (909) (509) (1.5453 (2,054) (918) (945) (1.863) Financing Activities Net Purchases of Short-Term Investments Net Long-Term Debt Proceeds Dividend Treasury Stock Purchase Other Equity Account Changes Net Cash Required by Financing Activities 198) ISI (133) (123) 242 (489) (299) (191) 475 (262) (246) 642 (481) (363) 691 479 306 Net Increase (Decrease) in Cash 935 5 94) 747 Note: Statement developed by case writer to be consistent with accompanying income statement and balance sheet while employing reported depreciation and capital expenditure amounts. Company reported figures may differ since they are reported net of acquisitions Data source: Monsanto annual reports, 2005-08 Title Page Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 4 MONSANTO COMPANY Corn Production in the United States Year Total Acrease Planted (000) Total Harvest Harvestused for Grain Yield per Acre (bushels) Production in Bushels (000) 1998 1999 2000 2001 2002 80,165 77.386 79.551 75,702 78,894 78,603 80.929 81.779 78,327 93.600 78,502 76,524 78.522 74 910 76,452 77.527 79,732 81.047 77.125 92.613 72.589 70,487 72.440 68.768 69,330 70.944 71.631 75.117 70.648 86,542 134.44 133.79 136.87 138.18 129.33 142.21 160 25 147.96 149.12 151.07 9,758,685 9.430,612 9.915.051 9,502,580 8,966,787 10,089.222 11,807,086 11.114.02 10.544.868 13,073,893 2003 2004 2005 2006 2007 Data source: Agriculture Statistics land, US Department of Agriculture. Title Page Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit MONSANTO COMPANY Income Statement in millions of dollars) Years ended August 31 2,006 2.007 Revenue growth 2.008 2009F 2.005 Net Sales Roundup Com Seeds and Traits All Other 5% management forecast 10% management forecast 11% 2008 growth rate 2,049 1.494 2.7321 6,275 3.280 2.995 2.262 1,793 3.0101 7.065 3,6221 3,443 2,568 2.807 2.9741 8,149 4,1191 4,230 4,094 3,542 3,7291 11.365 5,188 6.177 Cost of Goods Sold Gross Profits Selling, General, and Administrative Research & Development Operating Expenses 1.404 8131 2.217 1.604 700 2.304 1.858 9631 2.821 2.312 1.1441 3.456 Net Income from Operations 1.139 1,409 304 -123 312 lis 1331 1101 Other Expenses Interest Expense Income Before Taxes Income Taxes Net Income 2.923 359 1041 255 1,019 330 6 891 1361 1.396 4031 99312 899 .024 Data source: Monsanto Company annual reports, 2005 08. Version A Roundup growth -5% Title Page Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 2 MONSANTO COMPANY Balance Sheet (in millions of dollars) As of August 31 2,006 2.007 2.005 2008 525 1.473 1.664 1.460 1.455 Assets Cash Accounts Receivablea) Inventory Other Current Assets Current Assets 1.688 866 1.578 1.719 1.000 5,163 1.613 2.703 2.453 1.476 8.245 982 5.461 Property. Plant, & Equipment. Net Goodwill Other Long Term Assetsb) Fixed Assets 2,378 2,401 1.156 5,935 2.418 2.751 1.098 6.267 2.656 4,040 1.1241 7.820 3,323 4,663 1.7601 ,746 9 Total Assets 10,5791 11.728 12.983 17.0011 126 2x 270 525 514 649 1,090 208 234 161 Liabilities and Shareholders' Equity Short-Term Debt Accounts Payable Income Taxes Payable Dividends Payable Deferred Revenues Other Accruals Current Liabilities 120 150 26 260 1.650 3,075 1,300 2,159 1,328 2.279 867 2,1651 4,439 Long-Term Debt Other Deferred Revenue Liabilities 1.458 1.249 1.639 1285 1.150 1.255 1.792 2.386 Total Liabilities 4.9661 5.203 86171 Common Stock Treasury Stock Additional Contributed Capital Retained Earnings Shareholders' Equity 9,106 -500 SRR -2.478 5.613 8.879 -1.737 -1.177 9495 1.050 9.374 Total Liabilities and Equity 10.5791 11.72 17.991 (a) Includes some long term receivables b) Largely deferred tones Data Source: Monste r parts, 2005-08 Title Page Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 3 MONSANTO COMPANY Statement of Cash Flows (in millions of dollars) 2008 2,024 527 58 573 (636) 18 Year Ended August 31 2006 2007 Operating Activities Net Income 689 993 Adjustments for Items That Did Not Require(Provide) Cash: Depreciation and Amortization 519 Deferred Taxes Other Long-Term Assets) (26) Changes is Assets and Liabilities That Provided (Required) Cash: Accounts Receivable(a) (123) Inventory (24) Other Current Assets (142) Accounts Payable (11) 135 Income Taxes Payable (84) Dividends Payable Deferred Revenues 140 Other Accruals Other Deferred Revenue/Liabilities (64) Net Cash Provided by Operating Activities 1.538 1,722 (1.125) (734) 1476) 441 124 41 11 36 120 322 (20) 607 515 1.131 2.367 Investing Activities Capital Expenditures Acquisitions Net Cash Required by Investing Activities (370) (539) (909) (509) (1.5453 (2,054) (918) (945) (1.863) Financing Activities Net Purchases of Short-Term Investments Net Long-Term Debt Proceeds Dividend Treasury Stock Purchase Other Equity Account Changes Net Cash Required by Financing Activities 198) ISI (133) (123) 242 (489) (299) (191) 475 (262) (246) 642 (481) (363) 691 479 306 Net Increase (Decrease) in Cash 935 5 94) 747 Note: Statement developed by case writer to be consistent with accompanying income statement and balance sheet while employing reported depreciation and capital expenditure amounts. Company reported figures may differ since they are reported net of acquisitions Data source: Monsanto annual reports, 2005-08 Title Page Exhibit 1 Exhibit 2 Exhibit 3 Exhibit 4 Exhibit 4 MONSANTO COMPANY Corn Production in the United States Year Total Acrease Planted (000) Total Harvest Harvestused for Grain Yield per Acre (bushels) Production in Bushels (000) 1998 1999 2000 2001 2002 80,165 77.386 79.551 75,702 78,894 78,603 80.929 81.779 78,327 93.600 78,502 76,524 78.522 74 910 76,452 77.527 79,732 81.047 77.125 92.613 72.589 70,487 72.440 68.768 69,330 70.944 71.631 75.117 70.648 86,542 134.44 133.79 136.87 138.18 129.33 142.21 160 25 147.96 149.12 151.07 9,758,685 9.430,612 9.915.051 9,502,580 8,966,787 10,089.222 11,807,086 11.114.02 10.544.868 13,073,893 2003 2004 2005 2006 2007 Data source: Agriculture Statistics land, US Department of Agriculture
