Estimating Share Value Using the ROPI Model Assume the following are the income statement and balance sheet for Intel Corporation. 6,309 18 35 INTEL CORPORATION Consolidated Statements of Income Year Ended (In millions) Dec. 25, 2010 Dec. 26, 2009 Dec. 27, 2008 Net revenue $ 44,223 $35,127 $ 37,586 Cost of sales 15,132 15,566 16,742 Gross margin 29,091 19,561 20,844 Research and development 6,576 5,653 5,722 Marketing, general and adminstrative 7,931 5,452 Restructuring and asset impairment charges 231 710 Amortization of acquisition-related intangibles Operating expenses 12,903 13,850 11,890 Operating income 16,188 5,711 8,954 Gains (losses) on equity method investments, net* 117 (147) (1,380) Gains (losses) on other equity investments, net 231 (23) (376) Interest and other, net 109 163 488 Income before taxes 16,645 5,704 7,686 Provisions for taxes 4,581 1,335 2,394 Net income $ 12,064 $4,369 $5,292 *This should be considered as part of operating income. Question 10 Answer saved Marked out of 22.00 P Flag question Forecast the Statement of Cash Flows Following are the income statements and balance sheets of Best Buy Co., Inc. Income Statement, Fiscal Years Ended ($ millions) 2012 Feb. 26, Estimated 2011 $53,037 $50,272 39,672 37,611 Revenue 24 13,365 10,873 12,637 10,325 198 2,492 2,114 Cost of goods sold Restructuring charges - cost of goods sold Gross profit Selling, general and administrative expenses Restructuring charges Goodwill and tradename impairment Operating income Other income (expenses) Investment income and other Interest expense Earnings before income tax expense and equity in income of affiliates Income tax expense Equity in income of affiliates Net earnings including noncontrolling interests Net earnings attributable to noncontrolling interests Net earnings attributable to Best Buy Co., Inc. (87) 2,456 845 2 1,613 (121) $1,492 51 (87) 2,078 714 2 1,366 (89) $1,277 Balance Sheet ($ millions) 2012 Estimated Feb. 26, 2011 Assets Cash and cash equivalents Short-term investments Receivables Merchandise inventories Other current assets Total current assets Gross property and equipment Less accumulated depreciation Net property and equipment Goodwill Tradenames, Net Customer Relationships, Net Equity and Other Investments Other assets Total assets Liabilities and Equity Accounts payable Unredeemed giftcard liabilities Accrued compensation and related expenses Accrued liabilities Accrued income taxes Short-term debt Current portion of long-term debt Total current liabilities Long-term liabilities Long-term debt Best Buy Co., Inc. Shareholders' Equity $1,167 $1,103 852 22 2,493 2,348 6,205 5,897 1,167 1,103 11,884 10,473 8,701 7,905 5,031 4,082 3,670 3,823 2,454 2,454 108 133 165 328 328 477 435 $ 19,086 $ 17,849 203 $5,145 477 583 1,538 265 $4,894 474 570 1,471 256 557 441 8,663 1,183 711 557 37 8,602 1,183 674 39 Best Buy Co., Inc. Shareholders' Equity Preferred stock, $ 1.00 par value: Authorized-400,000 shares; Issued and outstanding-none Common stock $0.10 par value: Authorized-1.0 billion shares; Issued and outstanding-392,590,000 and 418,815,000 shares, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive income Total Best Buy Co., Inc. shareholders' equity Noncontrolling interests Total equity Total liabilities and shareholders' equity 18 7,586 173 7,816 811 8,627 $19,086 18 6,372 173 6,602 690 7,292 $17,849 CAPEX (Increase in gross Property and equipment)/Net sales 1.50% Depreciation expense/Prior year gross PPE 12.00% Dividends/Net income 18.60% Long-term debt payments required in fiscal 2013 $37 Refer to the financial information above for Best Buy Co., Inc. Prepare a forecast of its financial year 2012 statement of cash flows. (Hint: Use net income including noncontrolling interests to begin the statement of cash flows. Use negative signs in answers when appropriate.) Round all answers to the nearest whole number. Use negative signs with answers, when appropriate. Best Buy Forecasted Statement of Cash Flows ($ millions) 2012 Estimated Net income including noncontrolling interests 1,613 Add: depreciation Add: amortization Change in Accounts receivable Change in Inventories Change in Other current assets Change in Other long-term assets Change in Accounts payable Change in Unredeemed gift card liabilities Change in Accrued compensation and related expenses Change in Accrued liabilities Change in Accrued income taxes Net cash from operating activities Capital expenditures Increase in Short-term investments Net cash from investing activities Dividends Payments of LT debt Net cash from financing activities Net change in cash Beginning cash Ending cash