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	$10,390
Cost of revenue	7,458
Product development	991
Marketing and administrative	453
Amortization of intangibles	23
Restructuring and other, net	(22)
Total operating expenses	8,903
Income from operations	1,487
Interest income	84
Interest expense	(224)
Other, net	25
Other expense, net	(115)
Income before income taxes	1,372
(Benefit) provision for income taxes	(640)
Net income	$2,012

SEAGATE TECHNOLOGY PLC Consolidated Balance Sheet
Consolidated Balance Sheet
$ millions	June 28, 2019
Current assets
Cash and cash equivalents	$2,220
Accounts receivable, net	989
Inventories	970
Other current assets	184
Total current assets	4,363
Property, equipment and leasehold improvements, net	1,869
Goodwill	1,237
Other intangible assets, net	111
Deferred income taxes	1,114
Other assets, net	191
Total assets	$8,885
Current liabilities
Accounts payable	$1,420
Accrued employee compensation	169
Accrued warranty	91
Accrued expenses	552
Total current liabilities	2,232
Long-term accrued warranty	104
Long-term accrued income taxes .	4
Other noncurrent liabilities	130
Long-term debt, less current portion	4,253
Total liabilities	6,723
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	0
Additional paid-in capital	6,545
Accumulated other comprehensive loss	(34)
Accumulated deficit	(4,349)
Total shareholders' equity	2,162
Total liabilities and shareholders' equity	$8,885

Forecast Seagate Technology's 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 growth	5%	growth
Cost of revenue	71.8%	of revenue
Product development	9.5%	of revenue
Marketing and administrative	4.4%	of revenue
Amortization of intangibles		No change
Restructuring and other, net	$0	million
Interest income		No change
Interest expense		No change
Other, net		No change
Income tax rate	21%

	SEGATE TECHNOLOGY PLC
	Consolidated Statement of Income
	$ millions	June 2020
	Revenue	Answer 1
	Cost of revenue	Answer 2
	Product development	Answer 3
	Marketing and administrative	Answer 4
	Amortization of intangibles	Answer 5
	Restructuring and other, net	Answer 6
	Total operating expenses	Answer 7
	Income from operations	Answer 8
	Interest income	Answer 9
	Interest expense	Answer 10
	Other, net	Answer 11
	Other expense, net	Answer 12
	Income before income taxes	Answer 13
	(Benefit) provision for income taxes	Answer 14
	Net income	Answer 15

Forecast Seagate Technology's 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, net	9.5%	of revenue
Inventories	9.3%	of revenue
Other current assets	1.8%	of revenue
Deferred income taxes	10.7%	of revenue
Other assets, net	1.8%	of revenue
Accounts payable	13.7%	of revenue
Accrued employee compensation	1.6%	of revenue
Accrued warranty	0.9%	of revenue
Accrued expenses	5.3%	of revenue
Long-term accrued warranty	1.0%	of revenue
Other noncurrent liabilities	1.3%	of revenue
Goodwill		No change
Long-term accrued income taxes		No change
Long-term debt, less current portion		No change
Ordinary Shares		No change
Accumulated other comprehensive loss		No change
CAPEX	5.8%	of revenue
Depreciation expense	5.4%	of beginning Property, equipment and leasehold improvements, gross
Beginning Property, equipment and leasehold improvements, gross	$9,835	million
Stock-based compensation	$99	million, 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 ratio	35.4%

	SEAGATE TECHNOLOGY PLC Consolidated Balance Sheet
	Consolidated Balance Sheet
	$ millions	June 2020
	Current assets
	Cash and cash equivalents	Answer 16
	Accounts receivable, net	Answer 17
	Inventories	Answer 18
	Other current assets	Answer 19
	Total current assets	Answer 20
	Property, equipment and leasehold improvements, net	Answer 21
	Goodwill	Answer 22
	Other intangible assets, net	Answer 23
	Deferred income taxes	Answer 24
	Other assets, net	Answer 25
	Total assets	Answer 26
	Current liabilities
	Accounts payable	Answer 27
	Accrued employee compensation	Answer 28
	Accrued warranty	Answer 29
	Accrued expenses	Answer 30
	Total current liabilities	Answer 31
	Long-term accrued warranty	Answer 32
	Long-term accrued income taxes .	Answer 33
	Other noncurrent liabilities	Answer 34
	Long-term debt, less current portion	Answer 35
	Total liabilities	Answer 36
	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	Answer 37
	Additional paid-in capital	Answer 38
	Accumulated other comprehensive loss	Answer 39
	Accumulated deficit	Answer 40
	Total shareholders' equity	Answer 41
	Total liabilities and shareholders' equity	Answer 42

SEAGATE TECHNOLOGY PLC Consolidated Balance Sheet Consolidated Balance Sheet LS Current assets Cash and cash equivalents Accounts receivable, net Inventories Other 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 . June 2020 2,935 1,036 1,015 196 5182 1,571 1,237 88 1,167 196 9,841 1,495 175 98 578 2,346 109 ~ L8 488 X[/ 4 x L8848