Balance Sheet

All figures in millions of U$.$S$.$ Dollar except per share items.

FY$2015$ FY$2016$ FY$2017$

Assets

Cash & Short$-$Term Investments $2,2162,5383,595$

Short$-$Term Receivables $1,8902,0291,952$

Inventories $11,80912,54912,748$

Other Current Assets $1,078608638$

Total Current Assets $16,99317,72418,933$

Property and equipment, at cost $39,26640,42641,414$

Accumulated depreciation and amortization $17,07518,51219,339$

Net Property, Plant & Equipment $22,19121,91422,075$

Intangible Assets $2,6652,0932,275$

Deferred Tax Assets $4891119$

Other Assets $6521,1441,127$

Total Assets $42,54942,96644,529$

Liabilities & Shareholders' Equity

ST Debt & Curr. Portion LT Debt $4271,2522,761$

Accounts Payable $6,5657,0007,244$

Income Tax Payable $362554$

Other Current Liabilities $5,4985,8566,135$

Total Current Liabilities $12,52614,13316,194$

Long$-$Term Debt $20,88822,34924,267$

Deferred Tax Liabilities $854296440$

Other Liabilities $1,9651,8552,174$

Total Liabilities $36,23338,63343,075$

Common Equity $6,3164,3331,454$

Total Shareholders' Equity $6,3164,3331,454$

Total Equity $6,3164,3331,454$

Total Liabilities & Shareholders' Equity $42,54942,96644,529$

Income Statement

All figures in millions of U$.$S$.$ Dollar except per share items.

FY$2015$ FY$2016$ FY$2017$

Net sales $88,51994,595100,904$

Cost of goods sold $-58,254-62,282-66,548$

Gross profit $30,26532,31334,356$

Selling, general and administrative $($SG&A$)-16,801-17,132-17,864$

Depreciation and amortization $-1,690-1,754-1,811$

Operating income $($EBIT$)11,77413,42714,681$

Interest and investment income $1663674$

Interest expense $-919-972-1,057$

Pre$-$Tax Income $11,02112,49113,698$

Income taxes $-4,012-4,534-5,068$

Net earnings $/$ loss $7,0097,9578,630$

Operating Assumptions:

Sales will grow at $7\%$ per year in the next $5$ years.

Cost of sales will be $67\%$ of total sales in the next $5$ years.

SG&A will be $17\%$ of total sales in the next $5$ years.

Annual Depreciation and Amortization increases by $60$ in each of the next $5$ years.

Capital expenditure $($CapEx$)$ will be $1,200$ in each of the next $5$ years.

Income Statement Assumptions:

Interest and investment income is $2\mathrm{.}5\%$ of the ending Cash & Short$-$Term Investments in the previous year.

Interest rate on debt is $5\%$ based on the ending ST Debt & Curr. Portion LT Debt and Long$-$Term Debt in the previous year.

Tax rate is assumed to be $21\%.$

$1,184$ million common shares outstanding.

Dividend payout ratio $=50\%$

Working Capital Assumptions

In the next $5$ years, AR to Sales ratio remains the same as that in the most recent fiscal year $($FY$2017).$

In the next $5$ years, Inventory to COGS ratio remains the same as that in the most recent fiscal year $($FY$2017).$

In the next $5$ years, Other current assets to Sales ratio remains the same as that in the most recent fiscal year $($FY$2017).$

In the next $5$ years, AP to COGS ratio remains the same as that in the most recent fiscal year $($FY$2017).$

In the next $5$ years, Income Tax Payable to Sales ratio remains the same as that in the most recent fiscal year $($FY$2017).$

In the next $5$ years, Other current liabilities to Sales ratio remains the same as that in the most recent fiscal year $($FY$2017).$

Assets Assumptions:

Intangible assets grows at the same rate as sales $(7\%)$ in the next $5$ years

Deferred tax assets grows at the same rate as sales $(7\%)$ in the next $5$ years

Other assets grows at the same rate as sales $(7\%)$ in the next $5$ years

Deferred tax liabilities grows at the same rate as sales $(7\%)$ in the next $5$ years

Other liabilities grows at the same rate as sales $(7\%)$ in the next $5$ years

Debt Assumptions

Short$-$term debt increases by $2\%$ in each year.

Long$-$term debt decreases by $8\%$ each year.

$1.$ Calculate the following measures for fiscal years $2015,$

$2016,$ and $2017$: $(1)$ profit margin, $(2)$ ROA, $(3)$ ROE, $(4)$

debt$-$to$-$equity ratio, $(5)$ accounts receivable days, $(6)$

days inventory outstanding, $(7)$ accounts payable days.

FY$2015$ FY$2016$ FY$2017$

Profit margin

ROA

ROE

Debt$-$to$-$equity ratio

Accounts receivable days

Days inventory outstanding

Accounts payable days

$2.$ Create projected income statements for years $2018,2019,2020,2021,$ and $2022$ based on the historical financial statements as well as the

information provided in the Assumptions worksheet.

FY$2015$ FY$2016$ FY$2017$ FY$2018$ FY$2019$ FY$2020$ FY$2021$ FY$2022$

Net sales $88,51994,595100,904$

Cost of goods sold $-58,254-62,282-66,548$

Gross profit $30,26532,31334,356$

Selling, general and administrative $($SG&A$)-16,801-17,132-17,864$

Depreciation and amortization $-1,690-1,754-1,811$

Operating income $($EBIT$)11,77413,42714,681$

Interest and investment income $1663674$

Interest expense $-919-972-1,057$

Pre$-$Tax Income $11,02112,49113,698$

Income taxes $-4,012-4,534-5,068$

Net earnings $/$ loss $7,0097,9578,630$

$3.$ Create projected balance sheet for years $2018,2019,2020,2021,$ and $2022$ based on the historical financial statements as well

as the information provided in the Assumptions worksheet.

$***$Hint: Working capital accounts may be calculated based on the working capital ratios in FY$2017($See Worki