Following are the financial statements of Harvard Square Corporation for the year ended December 31, 2020, and 2021 1- Prepare a forecasted income statement, balance sheet and a cash flows statement for the company for 2022. (65 pts) 2- Perform Profitability and Risk Analysis for 2022, using the following eight financial ratios: 1. ROA 2. ROCE 3. Current ratio 4. Revenues to cash ratio 5. Accounts Receivable Turnover 6. Days revenue held in cash 7. Operating cash flow to total liabilities 8. Altman's Z-score ; (Consider 660 mil.shares outstanding in 2022; Market price per share $45) Analyze and discuss your calculated ratios. (35 pts) Harvard Square Corporation Consolidated Income Statement For the year ended December 31 (In millions) 2021 2020 35,365 6,783 42,148 34,868 5,668 40,536 Net sales Products Services Total net sales Cost of sales Products Services Severance and other charges Other unallocated corporate costs 30,600 6,035 80 550 31,091 4,824 82 47 Total cost of sales 37,265 36,044 Gross profit Other operating income 4,883 487 4,492 220 Operating profit 5,370 4,712 -663 -443 Interest expense Other nonoperating income Earnings before income taxes Income tax expense Net earnings from continuing operations Net earnings (loss) from discontinued operations Net earnings 0 4,707 -1,100 3,607 1,549 5,156 30 4,299 -1,173 3,126 479 3,605 Harvard Square Corporation Consolidated Balance Sheet At December 31, 2020 (In millions) Cash and equivalents Receivables, net Inventories, net 2021 $1,737 8,200 4,670 $1,090 7,254 4,819 Other current assets 399 441 Assets of discontinued operations 0 969 Total current assets 15,006 14,573 Property, plant and equipment, net 5,559 5,389 Goodwill Intangible assets, net 10,765 4,093 10,695 4,022 Deferred income taxes 6,625 6,068 Other noncurrent assets 5,679 5,396 Assets of discontinued operations 0 3,161 Total assets 47,727 49,304 Accounts payable 1,543 1,745 Customer advances and amounts in excess of costs 6,576 6,703 Salaries, benefits and payroll taxes 1,674 1,707 Current portion of long-term debt 0 956 Other current liabilities 2,349 1,859 Liabilities of discontinued operations 0 948 Total current liabilities 12,142 13,918 Long-term debt, net Accrued pension liabilities Other postretirement benefit liabilities 14,200 13,800 14,305 11,807 855 1,070 Other noncurrent liabilities 4,569 4,902 Liabilities of discontinued operations 0 205 Total liabilities 45,566 46,207 Common stock 298 303 13,870 14,238 Retained earnings Accumulated other comprehensive (loss) Total stockholders' equity Noncontrolling interests in subsidiary Total equity Total liabilities and equity -12,102 2,066 95 2,161 $47,727 -11,444 3,097 0 3,097 $49,304 Forecast the financial statements, making 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 sales: Products Growth in Net sales: Services Cost of sales to net sales - Products Cost of sales to net sales - Services Severances and other charges Other unallocated corporate costs.. Income tax expense to earnings before tax Earnings from discontinued operations A/R to total net sales Inventories to Net sales: Products Depreciation expense to start of year PPE, net CAPEX to total net sales Amortization expense to start of year intangible assets, net.... A/P to total net sales Customer advances to total net sales Salaries, benefits and payroll taxes to total net sales Accrued pension liabilities to total net sales Other postretirement benefit liabilities to total net sales Dividends to net earnings 14.50% 20.00% 90.65% 87.75% $0 $0 23.25% $0 17.50% 11.65% 21.25% 1.90% 4.90% 3.60% 14.20% 3.70% 29.30% 1.80% 33.50% Following are the financial statements of Harvard Square Corporation for the year ended December 31, 2020, and 2021 1- Prepare a forecasted income statement, balance sheet and a cash flows statement for the company for 2022. (65 pts) 2- Perform Profitability and Risk Analysis for 2022, using the following eight financial ratios: 1. ROA 2. ROCE 3. Current ratio 4. Revenues to cash ratio 5. Accounts Receivable Turnover 6. Days revenue held in cash 7. Operating cash flow to total liabilities 8. Altman's Z-score ; (Consider 660 mil.shares outstanding in 2022; Market price per share $45) Analyze and discuss your calculated ratios. (35 pts) Harvard Square Corporation Consolidated Income Statement For the year ended December 31 (In millions) 2021 2020 35,365 6,783 42,148 34,868 5,668 40,536 Net sales Products Services Total net sales Cost of sales Products Services Severance and other charges Other unallocated corporate costs 30,600 6,035 80 550 31,091 4,824 82 47 Total cost of sales 37,265 36,044 Gross profit Other operating income 4,883 487 4,492 220 Operating profit 5,370 4,712 -663 -443 Interest expense Other nonoperating income Earnings before income taxes Income tax expense Net earnings from continuing operations Net earnings (loss) from discontinued operations Net earnings 0 4,707 -1,100 3,607 1,549 5,156 30 4,299 -1,173 3,126 479 3,605 Harvard Square Corporation Consolidated Balance Sheet At December 31, 2020 (In millions) Cash and equivalents Receivables, net Inventories, net 2021 $1,737 8,200 4,670 $1,090 7,254 4,819 Other current assets 399 441 Assets of discontinued operations 0 969 Total current assets 15,006 14,573 Property, plant and equipment, net 5,559 5,389 Goodwill Intangible assets, net 10,765 4,093 10,695 4,022 Deferred income taxes 6,625 6,068 Other noncurrent assets 5,679 5,396 Assets of discontinued operations 0 3,161 Total assets 47,727 49,304 Accounts payable 1,543 1,745 Customer advances and amounts in excess of costs 6,576 6,703 Salaries, benefits and payroll taxes 1,674 1,707 Current portion of long-term debt 0 956 Other current liabilities 2,349 1,859 Liabilities of discontinued operations 0 948 Total current liabilities 12,142 13,918 Long-term debt, net Accrued pension liabilities Other postretirement benefit liabilities 14,200 13,800 14,305 11,807 855 1,070 Other noncurrent liabilities 4,569 4,902 Liabilities of discontinued operations 0 205 Total liabilities 45,566 46,207 Common stock 298 303 13,870 14,238 Retained earnings Accumulated other comprehensive (loss) Total stockholders' equity Noncontrolling interests in subsidiary Total equity Total liabilities and equity -12,102 2,066 95 2,161 $47,727 -11,444 3,097 0 3,097 $49,304 Forecast the financial statements, making 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 sales: Products Growth in Net sales: Services Cost of sales to net sales - Products Cost of sales to net sales - Services Severances and other charges Other unallocated corporate costs.. Income tax expense to earnings before tax Earnings from discontinued operations A/R to total net sales Inventories to Net sales: Products Depreciation expense to start of year PPE, net CAPEX to total net sales Amortization expense to start of year intangible assets, net.... A/P to total net sales Customer advances to total net sales Salaries, benefits and payroll taxes to total net sales Accrued pension liabilities to total net sales Other postretirement benefit liabilities to total net sales Dividends to net earnings 14.50% 20.00% 90.65% 87.75% $0 $0 23.25% $0 17.50% 11.65% 21.25% 1.90% 4.90% 3.60% 14.20% 3.70% 29.30% 1.80% 33.50%