LO2, 3, 4 AUTOZONE INC. E 11.21. Analyze. Forecast, and Interpret Income Statement and Balance Sheet Following are the income statements and balance sheets of AutoZone Inc. AUTOZONE INC. Consolidated Statements of Income 12 Months Ended $10,835876 5026,940 Cost of sales, including warehouse and delivery expenses Gross profit 5.608.736 Operating profit Interest expense, net Income before income taxes Income tax Net income 2,060,395 147,681 1.912,714 671.707 S 1,241,007 AUTOZONE INC. Consolidated Balance Sheet In thousands, except par value Current assets Cash and cash equivalents Aug. 27, 2016 $ 189.734 287,680 3,631.916 130,243 Other current assets. Total current assets 4,239,573 3,733,254 391887 36,855 198,218 net income taxes Total assets. $8,599,787 Current liabilties payable $4,096,854 Accrued expenses and other Income taxes payable Total current liabilities 42.841 4,690,320 4,924,119 284,500 488.386 income taxes Other long-term liabilities Stockholders' deficit Preferred stock, authorized 1 ,000 shares, no shares issued Common stock, par value $0.01 per share, authorized 200,000 shares 30,329 shares issued and 29,118 shares outstanding in 2016 and 32,098 shares issued and 30,659 shares outstanding in 2015 Additional paid-in capital Retained deficit 1,054,647 (307,529) (932,773) Treasury stock, at cost Total stockholders" deficit Liablities and stockholders' deficit (1,787.538 8,599,787 a. Forecast AutoZone's 2017 income statement and balance sheet using the following relations (S in thousands). All percentages (other than sales growth and provision for income taxes) are based on percent of net sales. Net sales growth. Cost of sales, including warehouse and delivery expenses. Operating, selling, general and admiristrative expenses. Interest Income tax expense (6 pretax income). 47.3% $145,000 3596 2796 net Other current assets. Accounts Accrued expenses and other Income taxes payable 1296 38.596 52% payable. CAPEX for 2017 will be 4.6% of 2017 Net sales and depreciation will be 8.3% of Property and equipment, net at the start of the fiscal year, which was $3.733.254 thousand. Goodwill, Deferred income taxes, Other long-term liabilities, AOCI, and Treasury stock will not change during the year Oher long-term assets include intangible assets. The 10-K reports that the 2017 amortization expense for intangibles will be $8,482 thousand. Long-term debt will decrease by $1,597.500 in 2017. per the 10-K .The company will continue its stock repurchases. Assume that during 2017, AutoZone will repur- chase 1 million shares at an average price of $750 per share. The company will retire these shares and reduce Common Stock by the par value (50.01 per share). Assume that these shares were originally issued at an average price of $35 per share. company does not pay dividends. b. What does the forecasted adjustment to balance the accounting equation from part a reveal to us about the forecasted cash balance and related financing needs of the company? Explain. Forecast the Statement of Cash Flows Refer to the AutoZone Ine. financial information in E1-21. Prepare a forecast of FY2017 statemnt of El l-22. L07 AUTOZONE INC cash flows LO2, 3, 4 AUTOZONE INC. E 11.21. Analyze. Forecast, and Interpret Income Statement and Balance Sheet Following are the income statements and balance sheets of AutoZone Inc. AUTOZONE INC. Consolidated Statements of Income 12 Months Ended $10,835876 5026,940 Cost of sales, including warehouse and delivery expenses Gross profit 5.608.736 Operating profit Interest expense, net Income before income taxes Income tax Net income 2,060,395 147,681 1.912,714 671.707 S 1,241,007 AUTOZONE INC. Consolidated Balance Sheet In thousands, except par value Current assets Cash and cash equivalents Aug. 27, 2016 $ 189.734 287,680 3,631.916 130,243 Other current assets. Total current assets 4,239,573 3,733,254 391887 36,855 198,218 net income taxes Total assets. $8,599,787 Current liabilties payable $4,096,854 Accrued expenses and other Income taxes payable Total current liabilities 42.841 4,690,320 4,924,119 284,500 488.386 income taxes Other long-term liabilities Stockholders' deficit Preferred stock, authorized 1 ,000 shares, no shares issued Common stock, par value $0.01 per share, authorized 200,000 shares 30,329 shares issued and 29,118 shares outstanding in 2016 and 32,098 shares issued and 30,659 shares outstanding in 2015 Additional paid-in capital Retained deficit 1,054,647 (307,529) (932,773) Treasury stock, at cost Total stockholders" deficit Liablities and stockholders' deficit (1,787.538 8,599,787 a. Forecast AutoZone's 2017 income statement and balance sheet using the following relations (S in thousands). All percentages (other than sales growth and provision for income taxes) are based on percent of net sales. Net sales growth. Cost of sales, including warehouse and delivery expenses. Operating, selling, general and admiristrative expenses. Interest Income tax expense (6 pretax income). 47.3% $145,000 3596 2796 net Other current assets. Accounts Accrued expenses and other Income taxes payable 1296 38.596 52% payable. CAPEX for 2017 will be 4.6% of 2017 Net sales and depreciation will be 8.3% of Property and equipment, net at the start of the fiscal year, which was $3.733.254 thousand. Goodwill, Deferred income taxes, Other long-term liabilities, AOCI, and Treasury stock will not change during the year Oher long-term assets include intangible assets. The 10-K reports that the 2017 amortization expense for intangibles will be $8,482 thousand. Long-term debt will decrease by $1,597.500 in 2017. per the 10-K .The company will continue its stock repurchases. Assume that during 2017, AutoZone will repur- chase 1 million shares at an average price of $750 per share. The company will retire these shares and reduce Common Stock by the par value (50.01 per share). Assume that these shares were originally issued at an average price of $35 per share. company does not pay dividends. b. What does the forecasted adjustment to balance the accounting equation from part a reveal to us about the forecasted cash balance and related financing needs of the company? Explain. Forecast the Statement of Cash Flows Refer to the AutoZone Ine. financial information in E1-21. Prepare a forecast of FY2017 statemnt of El l-22. L07 AUTOZONE INC cash flows