Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet

Following are the income statement and balance sheet of Seagate Technology for fiscal 2019.

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

SEGATE TECHNOLOGY PLC Consolidated Statement of Income For Year Ended June 28, 2019, $ millions Revenue$6,587Cost of revenue4,728Product development628Marketing and administrative287Amortization of intangibles15Restructuring and other, net(14)Total operating expenses5,644Income from operations943Interest income53Interest expense(142)Other, net16Other expense, net(73)Income before income taxes870(Benefit) provision for income taxes(406)Net income$1,276

SEAGATE TECHNOLOGY PLC Consolidated Balance Sheet Consolidated Balance Sheet $ millionsJune 28, 2019Current assets Cash and cash equivalents$1,407Accounts receivable, net627Inventories615Other current assets117Total current assets2,766Property, equipment and leasehold improvements, net1,185Goodwill784Other intangible assets, net70Deferred income taxes706Other assets, net121Total assets$5,632Current liabilities Accounts payable$900Accrued employee compensation107Accrued warranty58Accrued expenses350Total current liabilities1,415Long-term accrued warranty66Long-term accrued income taxes .3Other noncurrent liabilities82Long-term debt, less current portion2,696Total liabilities4,262Shareholders equity Ordinary shares par value $0.0001, 2.6 billion shares authorized, 1,340,697,595 and 1,354,218,154 shares issued and outstanding, respectively0Additional paid-in capital4,161Accumulated other comprehensive loss(34)Accumulated deficit(2,757)Total shareholders' equity1,370Total liabilities and shareholders' equity$5,632

Forecast Seagate Technologys 2020 income statement using the following forecast assumptions, which are expressed as a percentage of revenue unless otherwise indicated. Note: Complete the entire question in Excel (template provided above). Using Excel, format each answer to two decimal places. Use Increase Decimal or Decrease Decimal to adjust decimal places. Do not round answers. Then enter the answers into the provided spaces below with two decimal places. Note: Use negative signs with answers, when appropriate.

Assumptions Revenue growth5%growthCost of revenue71.8%of revenueProduct development9.5%of revenueMarketing and administrative4.4%of revenueAmortization of intangibles No changeRestructuring and other, net$0millionInterest income No changeInterest expense No changeOther, net No changeIncome tax rate21%

SEGATE TECHNOLOGY PLC Consolidated Statement of Income $ millionsJune 2020 Revenue Cost of revenue Product development Marketing and administrative Amortization of intangibles Restructuring and other, net Total operating expenses Income from operations Interest income Interest expense Other, net Other expense, net Income before income taxes (Benefit) provision for income taxes Net income

Forecast Seagate Technologys 2020 balance sheet using the following forecast assumptions, which are expressed as a percentage of revenue unless otherwise indicated. Note: Complete the entire question in Excel (template provided above). Using Excel, format each answer to two decimal places. Use Increase Decimal or Decrease Decimal to adjust decimal places. Do not round answers. Then enter the answers into the provided spaces below with two decimal places. Note: Use negative signs with answers, when appropriate.

Assumptions Accounts receivable, net9.5%of revenueInventories9.3%of revenueOther current assets1.8%of revenueDeferred income taxes10.7%of revenueOther assets, net1.8%of revenueAccounts payable13.7%of revenueAccrued employee compensation1.6%of revenueAccrued warranty0.9%of revenueAccrued expenses5.3%of revenueLong-term accrued warranty1.0%of revenueOther noncurrent liabilities1.3%of revenueGoodwill No changeLong-term accrued income taxes No changeLong-term debt, less current portion No changeOrdinary Shares No changeAccumulated other comprehensive loss No changeCAPEX5.8%of revenueDepreciation expense5.4%of beginning Property, equipment and leasehold improvements, grossBeginning Property, equipment and leasehold improvements, gross$6,235millionStock-based compensation$99million, 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.Dividend payout ratio35.4%

SEAGATE TECHNOLOGY PLC Consolidated Balance Sheet Consolidated Balance Sheet $ millionsJune 2020 Current assets Cash and cash equivalents Accounts receivable, net Inventories Other current assets Total current assets Property, equipment and leasehold improvements, net Goodwill Other intangible assets, net Deferred income taxes Other assets, net Total assets Current liabilities Accounts payable Accrued employee compensation Accrued warranty Accrued expenses Total current liabilities Long-term accrued warranty Long-term accrued income taxes . Other noncurrent liabilities Long-term debt, less current portion Total liabilities Shareholders equity Ordinary shares par value $0.0001, 2.6 billion shares authorized, 1,340,697,595 and 1,354,218,154 shares issued and outstanding, respectively Additional paid-in capital Accumulated other comprehensive loss Accumulated deficit Total shareholders' equity Total liabilities and shareholders' equity