For your Case, you are required to construct proforma financial statements for the given company. Submit your Case in Excel spreadsheets.

Please see the below link for the Case assignment with the grading rubric. Submit one Excel file. You must show your calculations in Excel to gain credit.

Following are the financial statements of Pratt & Whitney Corporation for the year ended December 31, 2020. 1- Prepare a forecasted income statement and balance sheet for the company for 2021. (65 pts) 2- Perform Risk Analysis for 2021, using the appropriate financial ratios for financial flexibility; short-term liquidity risk; and long-term solvency risk. Choose two ratios per category. (35 pts)

2019 $1,837 8,202 4,670 Pratt & Whitney Corporation Consolidated Balance Sheet At December 31 (In millions) Cash and equivalents Receivables, net Inventories, net Other current assets Assets of discontinued operations Total current assets Property, plant and equipment, net Goodwill Intangible assets, net Deferred income taxes Other noncurrent assets Assets of discontinued operations Total assets 2020 $2,584 $9,150 $4,521 $357 0 16,612 5,709 10,833 4,164 7,182 5,938 0 50,438 399 696 15,804 5,549 10,764 4,093 6,625 5,667 161 48,663 Accounts payable Customer advances and amounts in excess of costs Salaries, benefits and payroll taxes Current portion of long-term debt Other current liabilities Liabilities of discontinued operations Total current liabilities Long-term debt, net Accrued pension liabilities Other postretirement benefit liabilities Other noncurrent liabilities Liabilities of discontinued operations Total liabilities 1,561 6,849 1,821 0 2,839 0 13,070 14.259 15,903 654 4,416 1,653 6,776 1,764 574 2,349 59 13,175 14.282 13,855 862 4,659 224 47,057 0 48,302 Common stock Retained earnings Accumulated other comprehensive (loss) Total stockholders' equity Noncontrolling interests in subsidiary Total equity Total liabilities and equity 275 289 14,526 13,324 -12,760 -12,102 1,511 95 95 2,136 1,606 S50,438 $48,663 2,041 Continued next page 2020 2019 48,542 7,684 56,226 40,365 6,883 47 248 42,161 7,278 84 36 616 6,040 80 Pratt & Whitney Corporation Consolidated Income Statement For the year ended December 31 (in millions) Net sales Products Services Total net sales Cost of sales Products Services Severance and other charges Other unallocated corporate costs Total cost of sales Gross profit Other operating income Operating profit 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 47 -550 49,570 6,656 654 42,186 5,062 487 7,310 -872 0 6,438 -1,319 5,119 962 6,081 5,549 -663 0 4,886 -1,133 3,753 1549 5,302 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 17.00% 22.00% Growth in Net sales: Services 90.71% Cost of sales to net sales - Products 87.75% Cost of sales to net sales - Services Severances and other charges $0 Other unallocated corporate costs $0 23.19% Income tax expense to earnings before tax $0 Earnings from discontinued operations 17.36% AVR to total net sales 12.75% Inventores to Net sales: Products 22.10% Depreciation expense to start of year PPE, net 1.80% CAPEX to total net sales Amortization expense to start of year intangible assets, 4.80% net.......... 3.65% A/P to total net sales 13.40% Customer advances to total net sales 3.70% Salaries, benefits and payroll taxes to total net sales 29.90% Accrued pension liabilities to total net sales 1.80% Other postretirement benefit liabilities to total net sales 34.50% Dividends to net earnings 2019 $1,837 8,202 4,670 Pratt & Whitney Corporation Consolidated Balance Sheet At December 31 (In millions) Cash and equivalents Receivables, net Inventories, net Other current assets Assets of discontinued operations Total current assets Property, plant and equipment, net Goodwill Intangible assets, net Deferred income taxes Other noncurrent assets Assets of discontinued operations Total assets 2020 $2,584 $9,150 $4,521 $357 0 16,612 5,709 10,833 4,164 7,182 5,938 0 50,438 399 696 15,804 5,549 10,764 4,093 6,625 5,667 161 48,663 Accounts payable Customer advances and amounts in excess of costs Salaries, benefits and payroll taxes Current portion of long-term debt Other current liabilities Liabilities of discontinued operations Total current liabilities Long-term debt, net Accrued pension liabilities Other postretirement benefit liabilities Other noncurrent liabilities Liabilities of discontinued operations Total liabilities 1,561 6,849 1,821 0 2,839 0 13,070 14.259 15,903 654 4,416 1,653 6,776 1,764 574 2,349 59 13,175 14.282 13,855 862 4,659 224 47,057 0 48,302 Common stock Retained earnings Accumulated other comprehensive (loss) Total stockholders' equity Noncontrolling interests in subsidiary Total equity Total liabilities and equity 275 289 14,526 13,324 -12,760 -12,102 1,511 95 95 2,136 1,606 S50,438 $48,663 2,041 Continued next page 2020 2019 48,542 7,684 56,226 40,365 6,883 47 248 42,161 7,278 84 36 616 6,040 80 Pratt & Whitney Corporation Consolidated Income Statement For the year ended December 31 (in millions) Net sales Products Services Total net sales Cost of sales Products Services Severance and other charges Other unallocated corporate costs Total cost of sales Gross profit Other operating income Operating profit 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 47 -550 49,570 6,656 654 42,186 5,062 487 7,310 -872 0 6,438 -1,319 5,119 962 6,081 5,549 -663 0 4,886 -1,133 3,753 1549 5,302 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 17.00% 22.00% Growth in Net sales: Services 90.71% Cost of sales to net sales - Products 87.75% Cost of sales to net sales - Services Severances and other charges $0 Other unallocated corporate costs $0 23.19% Income tax expense to earnings before tax $0 Earnings from discontinued operations 17.36% AVR to total net sales 12.75% Inventores to Net sales: Products 22.10% Depreciation expense to start of year PPE, net 1.80% CAPEX to total net sales Amortization expense to start of year intangible assets, 4.80% net.......... 3.65% A/P to total net sales 13.40% Customer advances to total net sales 3.70% Salaries, benefits and payroll taxes to total net sales 29.90% Accrued pension liabilities to total net sales 1.80% Other postretirement benefit liabilities to total net sales 34.50% Dividends to net earnings