Question
Please help with part in bold: Analyze, Forecast, and Interpret Income Statement and Balance Sheet Following are the income statement and balance sheet of ADP
Please help with part in bold:
Analyze, Forecast, and Interpret Income Statement and Balance Sheet
Following are the income statement and balance sheet of ADP Inc.
DATA PROCESSING INC.
Statement of Consolidated Earnings
For Year Ended June 30, 2019, $ millions
Total revenues $28,350.4
Operating expenses 14,291.8
Systems development and programming costs 1,272.6
Depreciation and amortization 608.8
Total cost of revenues 16,173.2
Selling, general, and administrative expenses 6,128.4
Interest expense 259.8
Total expenses 22,561.4
Other (income) expense, net (222.2)
Earnings before income taxes 6,011.2
Provision for income taxes 1,425.6
Net earnings $4,585.6
DATA PROCESSING INC.
Balance Sheet
$ millions June 30, 2019
Current assets
Cash and cash equivalents $3,898.4
Accounts receivable, net 4,878.6
Other current assets 1,039.2
Total current assets before funds held for clients 9,816.2
Funds half for clients 58,868.4
Total current assets 68,684.6
Long-term receivables, net 47.6
Property, plant and equipment, net 1,528.4
Capitalized contract cost, net 4,857.0
Other assets 1,868.8
Goodwill 4,646.0
Intangible assets, net 2,143.0
Total assets $83,775.4
Current liabilities
Accounts payable $251.0
Accrued expenses and other current liabilities 3,518.0
Accrued payroll and payroll-related expenses 1,442.2
Dividends payable 680.2
Short-term deferred revenues 441.4
Obligations under reverse repurchase agreements 524.0
Income taxes payable 109.6
Total current liabilities before client funds obligations 6,966.4
Client funds obligations 58,289.0
Total current liabilities 65,255.4
Long-term debt 4,004.4
Other liabilities 1,597.4
Deferred income taxes 1,319.8
Long-term deferred revenues 798.6
Total liabilities 72,975.6
Shareholders' equity
Preferred stock, $1.00 par value; Authorized, 0.3 shares; issued , none
Common stock, $0.10 par value; Authorized, 1,000.0 shares;
issued, 1,277.4 shares; outstanding 868.4 shares 127.8
Capital in excess of par value 2,366.4
Retained earnings 35,001.2
Treasury stock, at cost: 409 shares (26,181.0)
Accumulated other comprehensive loss (514.6)
Total stockholders' equity 10,799.8
Total liabilities and stockholders' equity $83,775.4
Assume total revenues grow by 13% in 2020. All other percentages (other than sales growth and provision for income taxes) are based on historic percent of total revenues.
CAPEX for 2020 will be 1.1% of total revenue, and depreciation will be $368.8 million.
Goodwill, long-term debt, preferred stock, common stock, and Accumulated other comprehensive loss will not change for the year.
The company will acquire intangibles equal to 2.9% of total revenues and will record amortization expense of $552.2 million.
Income taxes will be 25% of pretax income and income taxes payable will be 7.7% of 2020 tax expense.
The company will award $334.6 million of stock-based compensation, which increases Capital in excess of par value by the same amount. Assume that the company routinely includes this form of compensation in operating expenses each year.
The company will continue its stock repurchases. DP will repurchase $1,500 million of treasury stock.
Dividends will be $2,778.80 in 2020, and dividends payable will be 26.3% of dividends.
Crate a forecast of FY2020 statement of cash flows.
Note: Round your answers to one decimal place (for example, enter 14.6 for 14.55555).
AUTOMATIC DATA PROCESSING, INC.
Forecasted Statement of Cash Flows
For Year Ended
$ millions June 2020
Net income (loss) Answer
0
Add: Depreciation Answer
0
Add: Amortization Answer
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Add: Stock based compensation Answer
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Accounts receivable, net Answer
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Other current assets Answer
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Funds held for clients Answer
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Long-term receivables, net Answer
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Capitalized Contract Cost, Net Answer
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Other assets Answer
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Accounts payable Answer
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Accrued expenses and other current liabilities Answer
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Accrued payroll and payroll-related expenses Answer
0
Short-term deferred revenues Answer
0
Obligations under reverse repurchase agreements Answer
0
Income taxes payable Answer
0
Client funds obligations Answer
0
Other liabilities Answer
0
Deferred income taxes Answer
0
Long-term deferred revenues Answer
0
Operating cash flow Answer
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Capital Expenditures Answer
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Additional intangibles acquired Answer
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Net cash from investing activities Answer
0
Dividends Answer
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Dividends payable Answer
0
Stock buy backs Answer
0
Net cash from financing activities Answer
0
Net change in cash Answer
0
Beginning cash Answer
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Ending cash Answer
0
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Fundamentals of Cost Accounting
Authors: William Lanen, Shannon Anderson, Michael Maher
3rd Edition
9780078025525, 9780077517359, 77517350, 978-0077398194
