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Following are revenue and cost of revenue numbers for Thermo Fisher Scientific. THERMO FISHER SCIENTIFIC INC. Consolidated Statement of Income For Year Ended December 31

Following are revenue and cost of revenue numbers for Thermo Fisher Scientific.

THERMO FISHER SCIENTIFIC INC.
Consolidated Statement of Income
For Year Ended December 31 ($ millions) 2018 2017
Revenues
Product revenues $16,981 $15,637
Service revenues 4,941 3,190
Total revenues 21,922 18,827
Costs and operating expenses
Product cost of revenues 8,714 8,078
Service cost of revenues 3,437 2,246
Total cost of revenues 12,151 10,324
Selling, general and administrative expenses 5,451 4,954
Research and development expenses 870 798
Restructuring and other costs, net 45 87
Total costs and operating expenses 18,517 16,163
Operating income 3,405 2,664
Other expense, net (469) (478)
Income from continuing operations before income taxes 2,936 2,186
Income tax expense 292 181
Income from continuing operations 2,644 2,005
Loss from discontinued operations 0 (3)
Net income $2,644 $2,002

Required a. Use the historic growth in total revenues (from 2017 to 2018) to forecast total revenue for 2019. Use the historic rate of total cost of revenues to total revenues to forecast total cost of revenues. Other forecast assumptions follow:

Selling, general and administrative expenses 24.9% of total revenues
Research and development expenses 4.0% of total revenues
Restructuring and other costs, net $0
Other expense, net No Change
Income tax expense 23% of pretax income

Rounding instructions:

  • Round growth rate factors for revenue accounts to three decimal places (for example, 1.034555 = 1.035) or one decimal place as a percentage (1.034555 = 103.5%).
  • Round rate of cost factors to one decimal place, as a percentage (for example, 0.634555 = 63.5%).
  • Round your final answers below to the nearest whole dollar.

Thermo Fisher Scientific
Forecasted Income Statement
Dec. 31, 2019
Forecast
Product Revenues Answer

Service Revenues Answer

Total Revenues Answer

Total cost of revenue Answer

Selling, general and administrative expenses Answer

Research and development expenses Answer

Restructuring and other costs, net Answer

Total costs and operating expenses Answer

Operating Income Answer

Other Expense, Net Answer

Income from Continuing Operations Before Income Taxes Answer

Income tax expense Answer

Net Income Answer

b. Refine your forecast by using the separate historic growth in product revenues and service revenues (from 2017 to 2018) to estimate 2019 product and service revenues respectively for 2019. Also, use the historic growth in cost of revenues for each segment to forecast separate segment cost of revenues. Assume other forecast assumptions are as in part a. Rounding instructions:

  • Round growth rate factors for revenue accounts to three decimal places (for example, 1.034555 = 1.035) or one decimal place as a percentage (1.034555 = 103.5%).
  • Round rate of cost factors to one decimal place, as a percentage (for example, 0.634555 = 63.5%).
  • Round your final answers below to the nearest whole dollar.

Thermo Fisher Scientific
Forecasted Income Statement
Dec. 31, 2019
Forecast
Revenues
Product Revenues Answer

Service Revenues Answer

Total Revenues Answer

Product Cost of revenues Answer

Service Cost of revenues Answer

Total cost of revenue Answer

Selling, general and administrative expenses Answer

Research and development expenses Answer

Restructuring and other costs, net Answer

Total costs and operating expenses Answer

Operating Income Answer

Other Expense, Net Answer

Income from Continuing Operations Before Income Taxes Answer

Income tax expense Answer

Net Income Answer

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