Instructions

The forecasting project is an individual assignment in which you will prepare a set of five$-$year

financial statement forecasts $($Income Statement and Balance Sheet$)$ for Walmart using the

assumptions provided in Integrative Case $10\mathrm{.}1$ for Walmart, Part A only $($pg$.708).$ Parts b$,$ c$,$

and $d$ are not required.

I provide a template for the forecast in an Excel file in Canvas. I also provide the calculations to

forecast Walmart's Capital Expenditures, Property, Plant and Equipment, and Depreciation

$("$Year $+1"$ and "Year $+2")$ in the same Excel file. You are still required to calculate the numbers

for "Year $+3"$ to "Year $+5.$

In addition, you need to analyze the profitability and risk of Walmart in "Year $+5"$ based on the

financial statements $($from the view of a financial analyst$).$ You need to prepare this analysis in

the form of a one$-$page executive summary. Your analysis should be supported by adequate

profit and risk ratios. Please show the detailed calculations of the ratios in an appendix.

Since this is an individual assignment, you may only consult with me$,$ and you should not

discuss the project with anyone else. The maximum score for this project is $9$ points $(5$ points

for the financial forecast and $4$ points for the executive summary$).$

Specific Instructions:

You may hard$-$key the $2016$ financial information into the spreadsheet, which will provide a

basis for your projected numbers. However, you should not hard$-$key any of your financial

statement forecast numbers into your spreadsheet. Rather, the financial statement forecasts

should include formulas that link the data in the three spreadsheets based on the assumptions

provided in the case $($Income Statement, Balance Sheet, and CapEx$/$Deprecation

Expense$/$PP&E$).$

Cash will serve as the flexible financial account $($I already provided the cash values for each

year in the Excel file$).$ In addition, I provided all numbers for noncontrolling interests.The forecasting project is an individual assignment in which you will prepare a set of five$-$year

assumptions provided in Integrative Case $10\mathrm{.}1$ for Walmart, Part A only $($pg$.708).$ Parts b$,$ c$,$

I provide a template for the forecast in an Excel file in Canvas. I also provide the calculations to

forecast Walmart's Capital Expenditures, Property, Plant and Equipment, and Depreciation

"Year $+$

In addition, you need to analyze the profitability and risk of Walmart in "Year $+5"$ based on the

financial statements $($from the view of a financial analyst$).$ You need to prepare this analysis in

profit and risk ratios. Please show the detailed calculations of the ratios in an appendix.

Since this is an individual assignment, you may only consult with me$,$ and you should not

discuss the project with anyone else. The maximum score for this for the financial forecast and $4$ points for the executive summary$)$

Specific Instructions:

You may hard$-$key the $2016$ financial information into the spreadsheet, which will provide a

basis for your projected numbers. However, you should not hard$-$key any of your financial statement forecast numbers into your spreadsheet. Rather, the financial statement forecasts

should include formulas that link the data in the three spreadsheets based on the assumptions

provided in the case $($Income Statement, Balance Sheet, and CapEx$/$Deprecation

Cash will serve as the flexible financial account $($I already provided the cash values for each year in the Excel file$).$ In addition, I provided all numbers for noncontrolling interests.

year in the Excel file$).$ In addition, I provided all numbers for noncontrolling interests.

FAQS Forecasting Project

Below, you will find frequently asked questions relating to the forecasting project

Q: I am not sure whether to use a constant turnover rate to forecast $\frac{A}{R}$ or to forecast

that it will grow at the same rate of sales.

A: Both methods should yield consistent forecasts. However, for the sake of simplicity, assume that A$/$R grows at the same rate as sales.

Q: Which Net Income should I use when I calculate the change in Retained Earnings

and the Dividends?

A: You should use Net Income Attributable to Common Shareholders.

Q: How should I forecast inventory?

A: Begin by calculating the daily COGS $($Annual COGS$/365).$ Then multiply the daily rate by

Q: Her days of COGS in ending inventory as described in the case.

A: Solve for annual purchases using beginning and ending inventory and COGS, and divide by

$365$ to obtain a daily purchases rate. Then multiply by the number of days of purchases in $\frac{A}{P}$

Q: How should I calculate the interest expense in the Income Statement?

A: The interest expense in Year $+1$ should be based on the average of Notes Payable$/$ST Debt, LT Debt$-$Current, and LT Debt$-$Long$-$Term $($years $2016$ and Year $+1).$

Q: How should I calculate OCI on the Income Statement?

A: It is $0$ for year $+1-$year $+5$ as Walmart did not have any items that would be properly reported