6. Perform common size analysis. What does this analysis tell you about your company? Are there any trends apparent with either the industry or your firm?

7. Use the extended DuPont equation to provide a summary and overview of your firm's financial condition.

8. Calculate the cost of each capital component, after-tax cost of debt, cost of preferred, and cost of equity with the DCF method and CAPM method.

9. What do you estimate the company's WACC?

Please show all calculations using numbers from the attached financials and show the source of the numbers as well. Thank you.

2017 {presented in thousands, except per share amounts and employee data} Consolidated Financial Data Operations: Revenue Gross Prot Income before income taxes Net Income Net income per share: Basic Diluted Shares used to compute basic net income per share Shares used to compute diluted net income per share Cash dividends declared per common share Financial Position Cash, Cash equivalents and shortterm investments Working Capital Total Assets Debt and capital lease obligations, non current Stockholder's equity Additional Data Worldwide employees Consolidated Balance Sheet {In thousands, except par value} Assets Current assets Cash and cash equivalents Shortterm investments Trade receivables net of allowances for doubtful accounts of $0,151 and $5,214 respectively Prepaid expenses and other current assets Total current assets Property and equipment, net Goodwill Purchased and other intangibles, net Investment in lease receivable Other assets Total assets i'a A December 1, 20'? $ 14,535,55500 {301,505.00 5,201,014.00 2,13i",541.00 1,503,054.00 3.43 3.30 403,532.00 501,123.00 5,010,??4.00 3,?20,355.00 14,535,555.00 1,001,421.00 0,450,050.00 1?,0?3.00 2,305,0Tr'2.00 3,513,?0200 1,21 ?,050.00 210,0?1.00 ?,24i",013.00 035,0?5.00 5,021,551.00 305,550.00 143,540.00 Liabilities and Stockholder's Equity Current liabilities Trade payables 113,538.00 Accrued Expenses 993,773.00 Income taxes payable 14, 196.00 Deferred revenue 2,405,950.00 Total current liabilities 3,527,457.00 Long-Term Liabilities: Debt and capital lease obligations 1,881,421.00 Deferred revenue 88,592.00 Income taxes payable 173,088.00 Deferred income taxes 279,941.00 Other liabilities 125, 188.00 Total Liabilities 6,075,687.00 Commitments and contingencies Stockholder's equity: Perferred stock, $0.0001 par value 2,000 shares authorized none issued Common stock $0.0001 par value; 900,000 shares authorized;600,834 shares issued; 491,262 and 494,254 shares outstanding, respectively 61 Additional paid in-capital 5,082, 195.00 Retained earnings 9,573,870.00 Accumulated other comprehensive income (loss) (111,821.00) Treasury stock, at cost (109,572 and 106,580 shares respectively), net of reissuances (6,084,436.00) Total stockholders' equity 8,459,869.00 Total liabilities and stockholders' equity 14,535,556.00Consolidated Statements of Income {In thousands, except per share data} Revenue Subscription $ 5,133,859.0'.' Product 70575710.". Service and support 450,859.03 Total Revenue 7,301,505.03 Cost of Revenue Subscription 523,048.0'.' Product 57,082.03. Services and support 330,351.03. Total Cost of Revenue 1,010,491.0'.' Gross Pro't 5,291,014.01 Operating Expenses Research and Development 1,224,059.02 Sales and marketing 2,197,592.01 General and administrative 524,?05.0'.' Amortization of purchased intangibles T5,552_0.'1 Total operating expenses 4,122,919.00 Operating Income 2,158,095.03 Non-operating income {expense}: Interest and other income {expense}, net 35,395.0'.' Interest expense {74,402.02} Investment gains [losses], net 7,553.01 Total nonoperating income [expense], net {30,454.01} Income before income taxes 2,137,541.01 Provision for income taxes 443,58?.0'.' Net income 5 1,593,954.0'.' Basic net income per share $ 3.43 Shares used to compute basic net income per share 493,532.0'.' Diluted net income per share 3.38 Shares used to compute diluted net income per share 501,1230- Consolidated Statements of Stockholder's Equity Common Stock Additional Accumulated Other Treasury Stock Total Shares Amount Paid-In Capital Retained Earnings Comprehensive Income (Loss) Shares Amount Balances at December 1, 2017 600,834 $ 61.00 $ 5,082, 195.00 $ 9,573,870.00 $ (111,821.00) $ (109,572 00) $ (6,084,436.00) $ 8,459,869.00 5 Financial Ratios Liquidity Ratios Current Ratio current assets/current liabilities 2.054685004 Acid-test ratio current assets-inventories/current liabilities 2.054685004 There are no inventories Cash ratio cash and cash equivalents/current liabilities 0.653749146 Operating cash flow ratio operating cash flow/current liabilities 0.614633998 Leverage Financial Ratios Debt ratio Total liabilities/total assets 0.417987932 Debt to equity ratio Total liabilities/shareholder's equity 0.718177433 Interest coverage ratio operating income/interest expenses -29. 14027849 Debt service coverage ratio Operating income/Total debt service 1.152371 Efficiency Ratios Asset turnover ratio Net sales/total assets 0.432801745 Inventory turnover ratio Cost of goods sold/Average inventory Does not apply no inventoriesProfitability Ratios Gross margin ratio Gross profit/Net sales 0.339792758 Operating margin ratio Operating incomeet sales 0.344633631 Return on assets ratio Net income/Total assets 0.116538645 Return on equity ratio Net income/shareholder's equity 0.20023407 Market Value Ratios Book value per share ratio Shareholder's equity/total shares outstanding 17.12 Dividend yield ratio Dividend per share/share price Earnings per share ratio Net earnings/Total shares outstanding 3.431613023 Price-earnings ratio Share price/Earnings per share 17.78Industry Ratios Comparison Compared with the following competitors Oracle Corporation, Salesforce.com Inc., Vmware Inc. and intuit Inc. Adobe was performing much better in 2017. Industry Data collected from ready ratios Debt ratio 0.66 Debt - to - equity ratio 0.52 Interest Coverage Ratio -0.34 Liquidity Ratios Current Ratio 1.26 Quick Ratio 1.12 Cash Ratio 0.41 Profitability Ratios Profit Margin -2.60% ROE (Return on equity), after tax -23.30% ROA (Return on assets) -4.30% Gross Margin 57.50% Operating margin (Return on sales) 2.20% Activity Ratios 449 Asset turnover (days) 54 Receivable turnover (days) 18 Inventory turnover (days) 0.24 Price Ratios Dividend Payout Ratio 0.36