Problem 1 (10pts) Appendix A presents the balance sheet of Intuit Inc. for years 2015 and 2016. Total revenues were $4,694 ($1,289 in product sales and $3,405 in service revenues and other) in 2016. Perform the following analyses using this information: a. Compute Intuit's gross accounts receivable at the end of 2015 and 2016. b. For both 2016 and 2015, compute the ratio of the allowance for uncollectable accounts to gross receivables. Comment on any trends you observe and provide a possible interpretation for them. c. Compute the receivables turnover ratio and the average collection period for 2016, Problem 2 (10pts) Appendix B presents selected disclosures from the 10-K of Facebook Inc. Compute net PP&E turnover for 2015 given that sales in 2015 were $17,928. Estimate the useful life, on average, for its depreciable PP&E assets at year-end 2015. By what percentage are Facebook's assets used up at year-end 2015. Discuss the implications of this for future cash flows at Facebook. 2016 2015 $ 638 442 108 20 0 102 $ 808 889 91 84 231 94 26 2,223 337 2,560 1,310 304 1,614 28 1,031 1,282 27 682 1,266 87 5 139 112 106 235 Appendix A Consolidated Balance Sheets - USD ($) Sin Millions Current assets: Cash and cash equivalents Investments Accounts receivable, net of allowance for doubtful accounts of $51 and $45 Income taxes receivable Deferred income taxes Prepaid expenses and other current assets Current assets of discontinued operations Current assets before funds held for customers Funds held for customers Total current assets Long-term investments Property and equipment, net Goodwill Acquired intangible assets, net Long-term deferred income taxes Other assets Long-term assets of discontinued operations Total assets Current liabilities: Short-term debt Accounts payable Accrued compensation and related liabilities Deferred revenue Other current liabilities Current liabilities of discontinued operations Current liabilities before customer fund deposits Customer fund deposits Total current liabilities Long-term debt Long-term deferred revenue Other long-term obligations Long-term obligations of discontinued operations Total liabilities Commitments and contingencies Stockholders' equity: Preferred stock. $0.01 par value Authorized - 1,345 shares total: 145 shares designated Series A: 250 shares designated Series B Junior Participating issued and outstanding None 4,250 4,968 512 283 184 190 289 801 691 161 150 0 93 1,947 1,407 304 337 2,2511,744 488 500 204 152 146 172 3,089 68 2,636 0 0 Common stock. $0.01 par value Authorized - 750,000 shares Outstandine - 257.853 shares at July 31, 2016 and 277,706 shares at July 31, 2015 Additional paid-in capital Treasury stock, at cost Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 4.442 (9.939) (32) 6,687 1,161 $ 4,250 4.007 (7.675) (30) 6,027 2,332 $4,968 Appendix B Property and Equipment Property and equipment consists of the following (in millions): Land Buildings Leasehold improvements Network equipment Computer software, office equipment and other Construction in progress Total Less: Accumulated depreciation Property and equipment, net 2015 596 2,273 447 3,633 248 622 7,819 2014 153 1,420 304 3,020 149 738 5,784 (1,817) 3,967 5,687 Note: Depreciation expense on property and equipment was $1.22 billion, $923 million, and $857 million during 2015, 2014, and 2013, respectively
