Following are the financial statements of CVS Health Corporation for the year ended December 31, 2016. Prepare a forecasted income statement and balance sheet for the company for the next year. 5 CVS Health Corporation Consolidated Balance Sheets In millions Dec. 31, Dec. 31, 2016 Cash and cash equivalents $ 3,371 $ 2,459 Short-term investments 88 Accounts receivable, net 12,164 11,888 Inventories 14,760 14,001 Other current assets Total current assets 31,042 29,158 Property and equipment, net 10,175 9,855 Goodwill 38,249 38,106 Intangible assets, net 13,511 13,878 Other assets 1,485 1,440 Total assets 94,462 92,437 Accounts payable 7,946 7,490 Claims and discounts payable 9,451 7,653 Accrued expenses 6,937 6,829 Short-term debt 1,874 7,946 9,451 6,937 1,874 7,490 7,653 6,829 26,250 25,615 1,197 23,169 26,267 4,217 1,542 1,549 22 Accounts payable 23 Claims and discounts payable 24 Accrued expenses 25 Short-term debt 26 Current portion of long-term debt 27 Total current liabilities 8 Long-term debt 9 Deferred income taxes 0 Other long-term liabilities 1 Redeemable noncontrolling interest 3 Common stock, par value $0.01 4 Treasury stock, at cost 5 Shares held in trust 5 Capital surplus Retained earnings 5 Accumulated other comprehensive loss Total CVS Health shareholders' equity Noncontrolling interest Total shareholders' equity Total liabilities and shareholders' equity (28,386) (31) 30,948 (33,452) (31) 31,618 38,983 (305) 36,830 37.196 7 37,203 92,437 36.834 94,462 CVS Health Corporation Consolidated Statements of Income In millions Dec. 31, 2016 Net revenues $177,526 Cost of revenues 148,669 Gross profit 28,857 Total operating expenses 18,519 Operating profit 10,338 Interest expense, net 1,058 Loss on early extinguishment of debt 643 Income before income tax provision 8,637 Income tax provision 3,317 Income from continuing operations 5,320 Income (loss) from discontinued operations, net (1) Net income 5,319 Net loss attributable to noncontrolling interest (2) Net income attributable to CVS Health Corporatio $5,317 Dec. 31, 20115 $153,290 126,762 26,528 17,074 9,454 838 0 8,616 3,386 5,230 9 5,239 (2) $5,237 To forecast the financial statements, make the following assumptions. For accounts that are not included in the list below, assume that the amount will not change for the forecasted year. Growth in net revenues 5.00% Cost of revenues 83.70% Operating expenses to net revenues 10.40% Loss on early extinguishment of debt $0 Income tax provision to income before income tax provision 38.40% Loss from discontinued operations $0 A/R to net revenues 6.90% Inventories to net revenues 8.30% CAPEX to net revenues 1.70% Forecasted depreciation expense (5 millions) $1,231 Forecasted amortization of intangible assets (5 millions) $302 Long-term debt due 2018 ($ millions) $1,916 A/P to net revenues 4.50% Claims and discounts payable to net revenues 5.3096 3.90% % Accrued expenses to net revenues 20.00% Dividends to net income attributable to CVS Health Corp. Dec 31, 2017 3 Enter your answer below 4 Forecasted Statement of Operations for year ended December 2017 (in millions) 5 Dec 31, 2016 6 Net revenues $177,526 7 Cost of revenues 148,669 3 Gross profit 28,857 Total operating expenses (includes Depr. and Am 18,519 Operating profit 10,338 Interest expense, net 1,058 Loss on early extinguishment of debt Income before income tax provision 8,637 Income tax provision 3,317 Income from continuing operations 5,320 Loss from discontinued operations Net income 5,319 Net income attributable to noncontrolling interes (2) Net income attributable to CVS Health Corporatio $5,317 Forecasted Consolidated Balance Sheet for December 2017 (in millions) Dar 21 2017 Dec. 31, 2017 101 Forecasted Consolidated Balance Sheet for December 2017 (in millions) 102 Dec. 31, 2016 103 Cash and cash equivalents S 3,371 104 Short-term investments 87 105 Accounts receivable, net 12,164 106 Inventories 14,760 107 Other current assets 660 108 Total current assets 31,042 209 Property and equipment, net 10,175 10 Goodwill 38,249 11 Intangible assets 13,511 12 Other assets 1,485 13 Total assets 94,462 15 Accounts payable 7,946 16 Claims and discounts payable 9,451 7 Accrued expenses 6,937 8 Short-term debt 1,874 9 Current portion of long-term debt 42 0 Total current liabilities 26,250 1 Long-term debt 25,615 2 Deferred income taxes 4,214 Other long-term liabilities 1,549 Redeemable noncontrolling interest 112 Other assets 113 Total assets 1,485 94,462 7,946 9,451 6,937 1,874 26,250 25,615 4,214 1,549 115 Accounts payable 116 Claims and discounts payable 117 Accrued expenses 118 Short-term debt 119 Current portion of long-term debt 120 Total current liabilities 21 Long-term debt 22 Deferred income taxes 23 Other long-term liabilities 24 Redeemable noncontrolling interest 26 Common stock 27 Treasury stock, at cost 28 Shares held in trust 29 Capital surplus 0 Retained earnings 1 Accumulated other comprehensive loss 2 Total CVS Health shareholders' equity 3 Noncontrolling interest Total shareholders' equity Total liabilities and shareholders' equity (33,452) (31) 31,618 38,983 (305) 36,830 36,834 94,462