Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Following are the income statement and balance sheet of ADP Inc. DATA PROCESSING INC. Statement of Consolidated Earnings For Year Ended June 30, 2019, $
Following are the income statement and balance sheet of ADP Inc.
DATA PROCESSING INC. | |
---|---|
Statement of Consolidated Earnings | |
For Year Ended June 30, 2019, $ millions | |
Total revenues | $7,087.6 |
Operating expenses | 3,573.0 |
Systems development and programming costs | 318.2 |
Depreciation and amortization | 152.2 |
Total cost of revenues | 4,043.4 |
Selling, general, and administrative expenses | 1,532.1 |
Interest expense | 65.0 |
Total expenses | 5,640.5 |
Other (income) expense, net | (55.6) |
Earnings before income taxes | 1,502.7 |
Provision for income taxes | 356.4 |
Net earnings | $1,146.3 |
DATA PROCESSING INC. | |
---|---|
Balance Sheet | |
$ millions | June 30, 2019 |
Current assets | |
Cash and cash equivalents | $974.8 |
Accounts receivable, net | 1,219.7 |
Other current assets | 259.8 |
Total current assets before funds held for clients | 2,454.3 |
Funds half for clients | 14,717.1 |
Total current assets | 17,171.4 |
Long-term receivables, net | 11.9 |
Property, plant and equipment, net | 382.1 |
Capitalized contract cost, net | 1,214.3 |
Other assets | 467.2 |
Goodwill | 1,161.5 |
Intangible assets, net | 535.8 |
Total assets | $20,944.2 |
Current liabilities | |
Accounts payable | $62.8 |
Accrued expenses and other current liabilities | 879.5 |
Accrued payroll and payroll-related expenses | 360.6 |
Dividends payable | 170.1 |
Short-term deferred revenues | 110.4 |
Obligations under reverse repurchase agreements | 131.0 |
Income taxes payable | 27.4 |
Total current liabilities before client funds obligations | 1,741.8 |
Client funds obligations | 14,572.3 |
Total current liabilities | 16,314.1 |
Long-term debt | 1,001.1 |
Other liabilities | 399.4 |
Deferred income taxes | 330.0 |
Long-term deferred revenues | 199.7 |
Total liabilities | 18,244.3 |
Shareholders' equity | |
Preferred stock, $1.00 par value; Authorized, 0.3 shares; issued , none | |
Common stock, $0.10 par value; Authorized, 1,000.0 shares; | |
issued, 319.4 shares; outstanding 217.1 shares | 32.0 |
Capital in excess of par value | 591.6 |
Retained earnings | 8,750.3 |
Treasury stock, at cost: 102.3 shares | (6,545.3) |
Accumulated other comprehensive loss | (128.7) |
Total stockholders' equity | 2,699.9 |
Total liabilities and stockholders' equity | $20,944.2 |
Assume total revenues grow by 13% in 2020. All other percentages (other than sales growth and provision for income taxes) are based on historic percent of total revenues.
- CAPEX for 2020 will be 1.1% of total revenue, and depreciation will be $92.2 million.
- Goodwill, long-term debt, preferred stock, common stock, and Accumulated other comprehensive loss will not change for the year.
- The company will acquire intangibles equal to 2.9% of total revenues and will record amortization expense of $138.1 million.
- Income taxes will be 25% of pretax income and income taxes payable will be 7.7% of 2020 tax expense.
- The company will award $83.7 million of stock-based compensation, which increases Capital in excess of par value by the same amount. Assume that the company routinely includes this form of compensation in operating expenses each year.
- The company will continue its stock repurchases. DP will repurchase $375 million of treasury stock.
- Dividends will be $694.70 in 2020, and dividends payable will be 26.3% of dividends.
Prepare a forecast of FY2020 statement of cash flows. Note: Round your answers to one decimal place (for example, enter 14.6 for 14.55555).
AUTOMATIC DATA PROCESSING, INC. | |
---|---|
Forecasted Statement of Cash Flows | |
For Year Ended | |
$ millions | June 2020 |
Net income (loss) | Answer |
Add: Depreciation | Answer |
Add: Amortization | Answer |
Add: Stock based compensation | Answer |
Accounts receivable, net | Answer |
Other current assets | Answer |
Funds held for clients | Answer |
Long-term receivables, net | Answer |
Capitalized Contract Cost, Net | Answer |
Other assets | Answer |
Accounts payable | Answer |
Accrued expenses and other current liabilities | Answer |
Accrued payroll and payroll-related expenses | Answer |
Short-term deferred revenues | Answer |
Obligations under reverse repurchase agreements | Answer |
Income taxes payable | Answer |
Client funds obligations | Answer |
Other liabilities | Answer |
Deferred income taxes | Answer |
Long-term deferred revenues | Answer |
Operating cash flow | Answer |
Capital Expenditures | Answer |
Additional intangibles acquired | Answer |
Net cash from investing activities | Answer |
Dividends | Answer |
Dividends payable | Answer |
Stock buy backs | Answer |
Net cash from financing activities | Answer |
Net change in cash | Answer |
Beginning cash | Answer |
Ending cash | Answer |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started