Please complete problem 1 and 2. (There is no additional information)

CHAPTER 7 1. Does the company report any accounts receivable in its current assets? What information does the annual report give about doubtful accounts? 4 2. Has accounts receivable increased or decreased during the year? Compute the accounts receivable turnover and the average number of days to collect account receivable. Does the collection period seem reasonable? (Use the sales amount as a proxy for the credit sales amount if it is not available.) Table of Contents Credit Risk . and Credit risk represents the possibility of loss from a customer failing to make payment according to contract terms. Our principal credit risk consists of outstanding trade accounts receivable. At March 31, 2021,35 percent of our trade accounts receivable was concentrated with our top ten customers. These customers operate primarily in the commercial vehicle, off-highway, automotive and light vehicle, commercial air conditioning, and refrigeration markets and are influenced by similar market and general economic factors. In the past, credit losses from our customers have not been significant, nor have we experienced a significant increase in credit losses in connection with the COVID-19 pandemic. We manage credit risk through a focus on the following: Cash and investments - We review cash deposits and short-term investments to ensure banks have acceptable credit ratings, and short-term investments are maintained in secured or guaranteed instruments. We consider our holdings in cash and investments to be stable and secure at March 31, 2021; Trade accounts receivable - Prior to granting credit, we evaluate each customer, taking into consideration the customer's financial condition, payment experience and credit information. After credit is granted, we actively monitor the customer's financial condition and applicable business news: Pension assets - We have retained outside advisors to assist in the management of the assets in our pension plans. In making investment decisions, we utilize an established risk management protocol that focuses on protection of the plan assets against downside risk. We ensure that investments within these plans provide appropriate diversification, the investments are monitored by investment teams, and portfolio managers adhere to the established investment policies. We believe the plan assets are subject to appropriate investment policies and controls; Insurance - We monitor our insurance providers to ensure they maintain financial ratings that are acceptable to us. We have not identified any concerns in this regard based upon our reviews. In addition, we are also exposed to risks associated with demands by our customers for decreases in the price of our products. We attempt to offset this risk with firm agreements with our customers whenever possible, but these agreements sometimes contain provisions for future price reductions. Economic and Market Risk Economic risk represents the possibility of loss resulting from economic instability in certain areas of the world or downturns in markets in which we operate. We sell a broad range of products that provide thermal solutions to customers operating in diverse markets, including the commercial, industrial, and building HVAC&R and commercial vehicle, off-highway, and automotive and light vehicle markets. The COVID-19 pandemic has negatively impacted many of these markets. While conditions in these markets have been steadily improving, future impacts of the COVID-19 pandemic are uncertain. Considering our global presence, we also encounter risks imposed by potential trade restrictions, including tariffs, embargoes, and the like. We continue to pursue non-speculative opportunities to mitigate these economic risks, and capitalize, when possible, on changing market conditions. We pursue new market opportunities after careful consideration of the potential associated risks and benefits. Successes in new markets are dependent upon our ability to commercialize our investments. Current examples of new and emerging markets for us include those related to electric vehicles, coils and coolers in certain markets, and coatings. Our investment in these areas is subject to the risks associated with technological success, customer and market acceptance, and our ability to meet the demands of our customers as these markets grow. Table of Contents Hedging and Foreign Currency Forward Contracts We use derivative financial instruments as a tool to manage certain financial risks. We prohibit the use of leveraged derivatives. Commodity Derivatives From time to time, we enter into over-the-counter forward contracts related to forecasted purchases of aluminum and copper. Our strategy is to reduce our exposure to changing market prices of these commodities. In fiscal 2021 and 2020, we designated certain commodity forward contracts as cash flow hedges for accounting purposes. Accordingly, for these designated hedges, we record unrealized gains and losses related to the change in the fair value of the contracts in other comprehensive income (loss) within shareholders' equity and subsequently recognize the gains and losses within cost of sales as the underlying inventory is sold. In fiscal 2021, 2020 and 2019, net gains and losses recognized in cost of sales related to commodity forward contracts were less than $1 million in each year. Foreign Currency Forward Contracts We use derivative financial instruments in a limited way to mitigate foreign currency exchange risk. We periodically enter into foreign currency forward contracts to hedge specific foreign currency-denominated assets and liabilities as well as forecasted transactions. We have designated certain hedges of forecasted transactions as cash flow hedges for accounting purposes. Accordingly, for these designated hedges, we record unrealized gains and losses related to the change in the fair value of the contracts in other comprehensive income (loss) within shareholders' equity and subsequently recognize the gains and losses as a component of earnings at the same time and in the same financial statement line that the underlying transactions impact earnings. In fiscal 2021, 2020, and 2019, net gains and losses recognized in sales and cost of sales related to foreign currency forward contracts were less than $1 million in each year. We have not designated forward contracts related to foreign currency- denominated assets and liabilities as hedges. Accordingly, for these non-designated contracts, we record unrealized gains and losses related to the change in the fair value of the contracts in other income and expense. Gains and losses on these non-designated foreign currency forward contracts are offset by foreign currency gains and losses associated with the related assets and liabilities. We manage counterparty risks by ensuring that counterparties to derivative instruments maintain credit ratings acceptable to us. At March 31, 2021, all counterparties had a sufficient long-term credit rating. Tohle of Contents ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. MODINE MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS For the years ended March 31, 2021, 2020 and 2019 (In millions, except per share amounts) $ 2021 1.808.4 1.515.0 293.4 210.9 13.4 166.8 2020 1.975.5 1.668.0 307.5 249.6 12.2. 8.6 (0.8 37.9 (22.7 (4.8) 10.4 (12.4 (2.09 (0.2 2019 2.212.7 1,847.2 365.5 244.1 9.6 0.4 1.7 109.7 (24.8) Net sales Cost of sales Gross profit Selling, general and administrative expenses Restructuring expenses Impairment charges (Gain) loss on sale of assets Operating (loss) income Interest expense Other expense - net (Loss) earnings before income taxes (Provision) benefit for income taxes Net (loss) earnings Net earnings attributable to noncontrolling interest Net (loss) earnings attributable to Modine Net doss) earnings per share attributable to Modine shareholders: Basic Diluted Weighted average shares outstanding: Basic Diluted (977) (19.4) (2.23 (119.3) (90.2) (209.5) (1.2 (210.7 80.8 5.1 85.9 (1.1 84.8 $ (2.2 $ (4.11) $ (4.11 $ (0.04) (0.04) S S 1.67 1.65 51.3 51.3 50.8 50.8 50.5 51.3 The notes to consolidated financial statements are an integral part of these statements. 44 Table of Contents 2020 2019 85.9 (2.0 MODINE MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the years ended March 31, 2021, 2020 and 2019 (In millions) 2021 Net (loss) earnings (209.5) Other comprehensive income (loss): Foreign currency translation 30.9 Defined benefit plans, net of income taxes of $10.4. ($8.3) and ($0.3) million 30.1 Cash flow hedges, net of income taxes of $0.6, (30.5) and $0.1 million 1.6 Total other comprehensive income (loss) 62.6 Comprehensive income (loss) (146.9) Comprehensive (income) loss attributable to noncontrolling interest (1.7 Comprehensive income (loss) attributable to Modine (148.6) (37.6 (1.4 (19.2) (24.5) (1.5 (45.3) 19194 (38.6 (47.3 0.2 (47.1) s 47.3 (0.6 46.7 $ The notes to consolidated financial statements are an integral part of these statements. 45 Table of contents Tablea.contents MODINE MANUFACTURING COMPANY CONSOLIDATED BALANCE SHEETS March 31, 2021 and 2020 (In millions, except per share amounts) 2021 2020 70.9 292.5 207.4 ASSETS Cash and cash equivalents Trade accounts receivable-net Inventories Assets held for sale Other current assets Total current assets Property, plant and equipment - net Intangible assets - net Goodwill Deferred income taxes Other noncurrent assets Total assets 37.8 267.9 195,6 107.6 35.9 644.8 269.9 100.6 170.7 24.5 66.2 1,276,7 62.5 633.3 448.0 106.3 166.1 104.8 77.6 1,536.1 $ S s 14.8 15.6 227.4 65.0 LIABILITIES AND SHAREHOLDERS' EQUITY Short-term debt Long-term debt - current portion Accounts payable Accrued compensation and employee benefits Liabilities held for sale Other current liabilities Total current liabilities Long-term debt Deferred income taxes Pensions Other noncurrent liabilities Total liabilities Commitments and contingencies (see Note 20) Shareholders' equity Preferred stock, $0.025 par value, authorized 16.0 million shares, issued - none Common stock, $0.625 par value, authorized 80.0 million shares, issued 54.3 million and 53.4 million shares Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost, 2.7 million and 2.5 million shares Total Modine shareholders' equity Noncontrolling interest Total equity Total liabilities and equity 1.4 21.9 233.9 66.5 103.3 42.2 469.2 311.2 5.9 58.6 75.7 920.6 Here 49.2 372.0 452.0 8.1 130.9 79.5 1,042.5 33.9 255.0 259,2 (161.2 (38.2 348.7 7.4 356.1 1.276.7 33.3 245.1 469.9 (223.3 (371) 487.9 5.7 493.6 1,536.1 $ S The notes to consolidated financial statements are an integral part of these statements. 46 Inbie.of.contents MODINE MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended March 31, 2021, 2020 and 2019 (In millions) 2021 2020 2019 (209.5) $ S Cash flows from operating activities: Net (Loss) earnings Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: Depreciation and amortization Impairment charges (Gain) loss on sale of assets Stock-based compensation expense Deferred income taxes Othernet Changes in operating assets and liabilities: Trade accounts receivable Inventories Accounts payable Accrued compensation and employee benefits Other assets Other liabilities Net cash provided by operating activities Cash flows from investing activities: Expenditures for property, plant and equipment Proceeds from dispositions of assets Proceeds from sale of investment in affiliate Proceeds from maturities of short-term investments Purchases of short-term investments Othernet Net cash used for investing activities Cash flows from financing activities: Borrowings of debt Repayments of debt Borrowings on bank overdraft facilities - net Dividend paid to noncontrolling interest Purchase of treasury stock under share repurchase program Financing fees paid Othernet Net cash (used for) provided by financing activities Effect of exchange rate changes on cash Net (decrease) increase in cash, cash equivalents, restricted cash and cash held for sale Cash, cash equivalents, restricted cash and cash held for sale - beginning of year Cash, cash equivalents, restricted cash and cash held for sale - end of year The notes to consolidated financial statements are an integral part of these statements. ... s la la. PG ES171 g El la. El IS SIBI:13: libel: SISIRIS Hazle be Bezbegal , el CECECE CIID 13 (60.5 (183.6 (0.8) 3.0 (145.1) DE-3333 | 11 1.4 (25.2) 71.3 46.1 (1.6) 29.1 42.2 $ ### ... LITER MODINE MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY For the years ended March 31, 2021, 2020 and 2019 (In millions) Additional Treasury Common stock paid-in Retained Accumulated other stock, Non-controlling Shares Amount tapital earnings comprehensive loss at cost interest Total Balance, March 31, 2018 52.3 $ 32.7 S 229.9 $ 394.9 $ (140.3) $ (27.1) $ 8.4 $ 498.5 Adoption of new accounting guidance (Note 1) (7.6 (7.6 Net earnings 84.8 1.1 85.9 Other comprehensive loss (38.1 (0.5) (38.6 Stock options and awards 0.5 0.3 0.8 Purchase of treasury stock (4.3 Stock-based compensation expense 7.9 Dividend paid to noncontrolling interest (1.8) Balance, March 31, 2019 52.8 33.0 238,6 472.1 (178.4) (31.4) 7.2 Net (loss) earnings (2.2 0.2 (2.0) Other comprehensive loss (44.9 (0.4) Stock options and 0.6 0.3 awards (0.1 Purchase of treasury stock (5.7 Stock-based 6.6 compensation expense Dividend paid to (1.3) noncontrolling interest Balance, March 31, 2020 53.4 33.3 245.1 469.9 (223.3) (37.1) 5.7 493.6 Net (loss) earnings (210.7) 1.2 (209.5 Other comprehensive 62.1 0.5 income Stock options and awards 0.9 0.6 3.6 Purchase of treasury stock (1.1 Stock-based 6.3 compensation expense Balance, March 31, 2021 54.3 $ 33.9 $ 255.0 $ 259.2 $ (161.2) $ (382) $ 74 $ 356.1 The notes to consolidated financial statements are an integral part of these statements. 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