Analyze, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance sheet of ADP Inc. DATA PROCESSING INC. Statement of Consolidated Earnings For Year Ended June 30, 2019, $ millions Total revenues $28,350.4 Operating expenses 14,291.8 Systems development and programming costs 1,272.6 Depreciation and amortization 608.8 Total cost of revenues 16,173.2 Selling, general, and administrative expenses 6,128.4 Interest expense 259.8 Total expenses 22,561.4 Other (income) expense, net (222.2) Earnings before income taxes 6,011.2 Provision for income taxes 1,425.6 Net earnings $4,585.6 June 30, 2019 DATA PROCESSING INC. Balance Sheet $ millions Current assets Cash and cash equivalents Accounts receivable, net Other current assets Total current assets before funds held for clients Funds half for clients Total current assets Long-term receivables, net Property, plant and equipment, net Capitalized contract cost, net Other assets Goodwill Intangible assets, net Total assets $3,898.4 4,878.6 1,039.2 9,816.2 58,868.4 68,684.6 47.6 1,528.4 4,857.0 1,868.8 4,646.0 2,143.0 $83,775.4 $251.0 3,518.0 1,442.2 680.2 441.4 524.0 109.6 Current liabilities Accounts payable Accrued expenses and other current liabilities Accrued payroll and payroll-related expenses Dividends payable Short-term deferred revenues Obligations under reverse repurchase agreements Income taxes payable Total current liabilities before client funds obligations Client funds obligations Total current liabilities Long-term debt Other liabilities Deferred income taxes Long-term deferred revenues Total liabilities Shareholders' equity Preferred stock, $1.00 par value; Authorized, 0.3 shares; issued, none Common stock, $0.10 par value; Authorized, 1,000.0 shares; issued, 1,277.4 shares; outstanding 868.4 shares Capital in excess of par value Retained earnings Treasury stock, at cost: 409 shares Accumulated other comprehensive loss Total stockholders' equity 6,966.4 58,289.0 65,255.4 4,004.4 1,597.4 1,319.8 798.6 72,975.6 127.8 2,366.4 35,001.2 (26,181.0) (514.6) 10,799.8 Total stockholders' equity Total liabilities and stockholders' equity 10,799.8 $83,775.4 Assume total revenues grow by 13% in 2020. All other percentages (other than sales growth and provision for income taxes) are based on historic percent of total revenues. . CAPEX for 2020 will be 1.1% of total revenue, and depreciation will be $368.8 million. Goodwill, long-term debt, preferred stock, common stock, and Accumulated other comprehensive loss will not change for the year. The company will acquire intangibles equal to 2.9% of total revenues and will record amortization expense of $552.2 million. Income taxes will be 25% of pretax income and income taxes payable will be 7.7% of 2020 tax expense. The company will award $334.6 million of stock-based compensation, which increases Capital in excess of par value by the same amount. Assume that the company routinely includes this form of compensation in operating expenses each year. The company will continue its stock repurchases. DP will repurchase $1,500 million of treasury stock. Dividends will be $2,778.80 in 2020, and dividends payable will be 26.3% of dividends. Prepare a forecast of FY2020 statement of cash flows. Note: Round your answers to one decimal place (for example, enter 14.6 for 14.55555). $ AUTOMATIC DATA PROCESSING, INC. Forecasted Statement of Cash Flows For Year Ended $ millions June 2020 Net income (loss) 32,036 x Add: Depreciation 0 x Add: Amortization OX Add: Stock based compensation 0 % Accounts receivable, net 0X Other current assets OX Funds held for clients 0 X OX Long-term receivables, net Capitalized Contract Cost, Net 0 x Other assets 0 x Accounts payable OX Accrued expenses and other current liabilities 0X Accrued payroll and payroll-related expenses 0 X OX Short-term deferred revenues Obligations under reverse repurchase agreements 0 X Income taxes payable 0 x Client funds obligations OX Other liabilities 0x Deferred income taxes 0 X 0 X Long-term deferred revenues 0x OX 0 x 0X 0 x 0X OX Other liabilities Deferred income taxes Long-term deferred revenues Operating cash flow Capital Expenditures Additional intangibles acquired Net cash from investing activities Dividends Dividends payable Stock buy backs Net cash from financing activities Net change in cash Beginning cash Ending cash OX 0 X 0 x OX 0 x 0 X $ $ 0 X Check Analyze, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance sheet of ADP Inc. DATA PROCESSING INC. Statement of Consolidated Earnings For Year Ended June 30, 2019, $ millions Total revenues $28,350.4 Operating expenses 14,291.8 Systems development and programming costs 1,272.6 Depreciation and amortization 608.8 Total cost of revenues 16,173.2 Selling, general, and administrative expenses 6,128.4 Interest expense 259.8 Total expenses 22,561.4 Other (income) expense, net (222.2) Earnings before income taxes 6,011.2 Provision for income taxes 1,425.6 Net earnings $4,585.6 June 30, 2019 DATA PROCESSING INC. Balance Sheet $ millions Current assets Cash and cash equivalents Accounts receivable, net Other current assets Total current assets before funds held for clients Funds half for clients Total current assets Long-term receivables, net Property, plant and equipment, net Capitalized contract cost, net Other assets Goodwill Intangible assets, net Total assets $3,898.4 4,878.6 1,039.2 9,816.2 58,868.4 68,684.6 47.6 1,528.4 4,857.0 1,868.8 4,646.0 2,143.0 $83,775.4 $251.0 3,518.0 1,442.2 680.2 441.4 524.0 109.6 Current liabilities Accounts payable Accrued expenses and other current liabilities Accrued payroll and payroll-related expenses Dividends payable Short-term deferred revenues Obligations under reverse repurchase agreements Income taxes payable Total current liabilities before client funds obligations Client funds obligations Total current liabilities Long-term debt Other liabilities Deferred income taxes Long-term deferred revenues Total liabilities Shareholders' equity Preferred stock, $1.00 par value; Authorized, 0.3 shares; issued, none Common stock, $0.10 par value; Authorized, 1,000.0 shares; issued, 1,277.4 shares; outstanding 868.4 shares Capital in excess of par value Retained earnings Treasury stock, at cost: 409 shares Accumulated other comprehensive loss Total stockholders' equity 6,966.4 58,289.0 65,255.4 4,004.4 1,597.4 1,319.8 798.6 72,975.6 127.8 2,366.4 35,001.2 (26,181.0) (514.6) 10,799.8 Total stockholders' equity Total liabilities and stockholders' equity 10,799.8 $83,775.4 Assume total revenues grow by 13% in 2020. All other percentages (other than sales growth and provision for income taxes) are based on historic percent of total revenues. . CAPEX for 2020 will be 1.1% of total revenue, and depreciation will be $368.8 million. Goodwill, long-term debt, preferred stock, common stock, and Accumulated other comprehensive loss will not change for the year. The company will acquire intangibles equal to 2.9% of total revenues and will record amortization expense of $552.2 million. Income taxes will be 25% of pretax income and income taxes payable will be 7.7% of 2020 tax expense. The company will award $334.6 million of stock-based compensation, which increases Capital in excess of par value by the same amount. Assume that the company routinely includes this form of compensation in operating expenses each year. The company will continue its stock repurchases. DP will repurchase $1,500 million of treasury stock. Dividends will be $2,778.80 in 2020, and dividends payable will be 26.3% of dividends. Prepare a forecast of FY2020 statement of cash flows. Note: Round your answers to one decimal place (for example, enter 14.6 for 14.55555). $ AUTOMATIC DATA PROCESSING, INC. Forecasted Statement of Cash Flows For Year Ended $ millions June 2020 Net income (loss) 32,036 x Add: Depreciation 0 x Add: Amortization OX Add: Stock based compensation 0 % Accounts receivable, net 0X Other current assets OX Funds held for clients 0 X OX Long-term receivables, net Capitalized Contract Cost, Net 0 x Other assets 0 x Accounts payable OX Accrued expenses and other current liabilities 0X Accrued payroll and payroll-related expenses 0 X OX Short-term deferred revenues Obligations under reverse repurchase agreements 0 X Income taxes payable 0 x Client funds obligations OX Other liabilities 0x Deferred income taxes 0 X 0 X Long-term deferred revenues 0x OX 0 x 0X 0 x 0X OX Other liabilities Deferred income taxes Long-term deferred revenues Operating cash flow Capital Expenditures Additional intangibles acquired Net cash from investing activities Dividends Dividends payable Stock buy backs Net cash from financing activities Net change in cash Beginning cash Ending cash OX 0 X 0 x OX 0 x 0 X $ $ 0 X Check