NVIDIA Corp. financial statements are presented below. Analysts forecast that its 2018 sales will be $8,260. The expected 2018 tax

rate will be 17.35%. Assume the firm pays 5% interest on short-term debt and 7% on long term debt.

Instructions:

a) Use your judgment to forecast the items on the income statement and balance sheet with the percent of sales method. What is the discretionary financing needed in 2018? Is this a surplus or deficit? Assume that the dividends per share will be $0.54 and the number of shares will be the same as in 2017.

b) Assume that DFN will be absorbed by long-term debt and that the interest rate is 2.5% of the sum of LTD and short-term debt. Set up an iterative worksheet to eliminate it.

c) Create a scatter chart of research and development vs. sales and add a linear trend line. Does there appear to be a consistent trend in this relationship?

d) Use the regression tool to verify your results from part c. Is the trend statistically significant? Use at least three methods to show why or why not.

NVIDIA Corp. financial statements are presented below. Analysts forecast that its 2018 sales will be $8,260. The expected 2018 tax rate will be 17.35%. Assume the firm pays 5% interest on short-term debt and 7% on long term debt. Instructions: a) Use your judgment to forecast the items on the income statement and balance sheet with the percent of sales method. What is the discretionary financing needed in 2018? Is this a surplus or deficit? Assume that the dividends per share will be $0.54 and the number of shares will be the same as in 2017. b) Assume that DFN will be absorbed by long-term debt and that the interest rate is 2.5% of the sum of LTD and short-term debt. Set up an iterative worksheet to eliminate it. Create a scatter chart of research and development vs. sales and add a linear trend line. Does there appear to be a consistent trend in this relationship? d) Use the regression tool to verify your results from part c. Is the trend statistically significant? Use at least three methods to show why or why not. Jan-17 Jan-16 5,010 2,002 6,910 Jan-15 4,682 1,862 Jan-14 4,130 1,623 Jan-13 4,280 1,828 Jan-12 3,998 1,743 For the Years 2012 to 2017 Jan-17 Jan-16 Jan-15 Jan-14 Jan-13 Jan-12 2,648 4,262 1,463 3,008 1,331 2,820 1,360 2,507 1,336 2,453 1,147 2,255 984 1,766 5,032 826 596 4,441 505 418 93 497 4,127 474 483 133 431 3,297 454 420 173 253 2,876 336 340 99 794 118 641 187 532 197 443 220 436 239 431 226 398 204 6,053 1,100 634 2 0 1,151 3,521 426 388 139 5,625 1,283 700 583 1,043 7,251 0 0 0 Sales Cost of Goods Sold Gross Income Research & Development Other SG&A Depreciation Expense Other Operating Expense EBIT (Operating Income) Nonoperating Income - Net Interest Expense Unusual Expense - Net Pretax Income Income Taxes Net Income 0 8,536 1,191 670 521 784 9,841 5,713 1,179 622 557 931 7,201 4,775 1,289 713 576 1,061 6,412 3,905 1,157 596 560 1,087 5,553 1,969 948 796 496 648 669 Assets Cash Short-Term Investments Accounts Receivable Inventories Other Current Assets Total Current Assets Gross Plant & Equipment Accumulated Depreciation Net Plant & Equipment Other Assets Total Assets Liabilities & Shareholders' Equity ST Debt & Current Portion LT Debt Accounts Payable Other Current Liabilities Total Current Liabilities Long-Term Debt Other Liabilities Total Liabilities Common Equity Total Liabilities & Shareholders' Equity 466 851 7,370 50 43 42 24 17 7 0.0 2.9 58 56 47 201 46 37 10 0 3 0 3 9 1,413.0 296.0 642.0 293.2 602.8 324.4 621.1 0.0 335.1 594.9 896.0 663 1,905 239 1,666 743 129 755 124 510 70 662 100 800.0 485.0 503.0 1,788.0 2,020 271 4,079 5,762 9,841 2,351.0 97 453 0.0 356.4 619.8 976.2 19 589 1,585 4,828 948.4 1,371 475 2,794 4,456 930.0 21 456 82 614 631 440 563 581 1,398 489 2,783 4,418 7,201 2,901 4,469 7,370 1,407 4,146 0.49 0.40 0.34 0.31 0.08 0.00 7,251 6,412 5,553 Dividends per Share Shares Outstanding Tax Rate 649.00 569.00 563.07 594.52 624.96 616.37 12.55% 17.36% 16.46% 13.77% 15.03% 12.41% NVIDIA Corp. financial statements are presented below. Analysts forecast that its 2018 sales will be $8,260. The expected 2018 tax rate will be 17.35%. Assume the firm pays 5% interest on short-term debt and 7% on long term debt. Instructions: a) Use your judgment to forecast the items on the income statement and balance sheet with the percent of sales method. What is the discretionary financing needed in 2018? Is this a surplus or deficit? Assume that the dividends per share will be $0.54 and the number of shares will be the same as in 2017. b) Assume that DFN will be absorbed by long-term debt and that the interest rate is 2.5% of the sum of LTD and short-term debt. Set up an iterative worksheet to eliminate it. Create a scatter chart of research and development vs. sales and add a linear trend line. Does there appear to be a consistent trend in this relationship? d) Use the regression tool to verify your results from part c. Is the trend statistically significant? Use at least three methods to show why or why not. Jan-17 Jan-16 5,010 2,002 6,910 Jan-15 4,682 1,862 Jan-14 4,130 1,623 Jan-13 4,280 1,828 Jan-12 3,998 1,743 For the Years 2012 to 2017 Jan-17 Jan-16 Jan-15 Jan-14 Jan-13 Jan-12 2,648 4,262 1,463 3,008 1,331 2,820 1,360 2,507 1,336 2,453 1,147 2,255 984 1,766 5,032 826 596 4,441 505 418 93 497 4,127 474 483 133 431 3,297 454 420 173 253 2,876 336 340 99 794 118 641 187 532 197 443 220 436 239 431 226 398 204 6,053 1,100 634 2 0 1,151 3,521 426 388 139 5,625 1,283 700 583 1,043 7,251 0 0 0 Sales Cost of Goods Sold Gross Income Research & Development Other SG&A Depreciation Expense Other Operating Expense EBIT (Operating Income) Nonoperating Income - Net Interest Expense Unusual Expense - Net Pretax Income Income Taxes Net Income 0 8,536 1,191 670 521 784 9,841 5,713 1,179 622 557 931 7,201 4,775 1,289 713 576 1,061 6,412 3,905 1,157 596 560 1,087 5,553 1,969 948 796 496 648 669 Assets Cash Short-Term Investments Accounts Receivable Inventories Other Current Assets Total Current Assets Gross Plant & Equipment Accumulated Depreciation Net Plant & Equipment Other Assets Total Assets Liabilities & Shareholders' Equity ST Debt & Current Portion LT Debt Accounts Payable Other Current Liabilities Total Current Liabilities Long-Term Debt Other Liabilities Total Liabilities Common Equity Total Liabilities & Shareholders' Equity 466 851 7,370 50 43 42 24 17 7 0.0 2.9 58 56 47 201 46 37 10 0 3 0 3 9 1,413.0 296.0 642.0 293.2 602.8 324.4 621.1 0.0 335.1 594.9 896.0 663 1,905 239 1,666 743 129 755 124 510 70 662 100 800.0 485.0 503.0 1,788.0 2,020 271 4,079 5,762 9,841 2,351.0 97 453 0.0 356.4 619.8 976.2 19 589 1,585 4,828 948.4 1,371 475 2,794 4,456 930.0 21 456 82 614 631 440 563 581 1,398 489 2,783 4,418 7,201 2,901 4,469 7,370 1,407 4,146 0.49 0.40 0.34 0.31 0.08 0.00 7,251 6,412 5,553 Dividends per Share Shares Outstanding Tax Rate 649.00 569.00 563.07 594.52 624.96 616.37 12.55% 17.36% 16.46% 13.77% 15.03% 12.41%