Refine Assumptions for Dividend and Retained Earnings Forecast Provided below is FY2016 information for Medtronic PLC. Medtronic plc Consolidated Statement of Income ($ millions) Apr. 29, 2016 Net sales $28,833 Costs and expenses Cost of products sold 9,142 Research and development expenses 2,224 Selling general, and administrative expense 9,469 Special charges (gains), net 70 Restructuring charge, net 290 Certain litigation charges, net Acquisition-related items 283 Amortization of intangiable assets 1,931 Other expense, net 107 Operating profit 5,291 Interest expense, net 955 Income from operations before income taxes 4,336 Provision for income taxes 798 Net income $3,538 26 Medtronic plc Consolidated Balance Sheet ($ millions) Apr. 29, 2016 Apr. 24, 2015 Current assets Cash and cash equivalents $2,876 $4,843 Investments 9.758 14,637 Accounts receivable 5,562 5,112 Inventories 3,473 3,463 Tax assets 697 1,335 Prepaid expenses and other current assets 1,234 1,454 Total current assets 23,600 30,844 Property, plant, and equipment, net 4,841 4,699 Goodwill 41,500 40,530 Other intangiable assets, net 26,899 28,101 Long-term tax assets 1,383 774 Other assets 1,559 1,737 Total assets $99,782 $106,685 Current liabilities Short-term borrowing $993 $2,434 Accounts payable 1,709 1,610 Accrued compensation 1,712 1,611 Accrued income taxes 566 935 Deferred tax liabilities 119 Other accrued expenses 2.185 2,464 Total current liabilities 7,165 9,173 Long-term debt 30,247 33,752 1,61U 1,709 1,712 566 Accounts payable Accrued compensation Accrued income taxes Deferred tax liabilities Other accrued expenses Total current liabilities Long-term debt Long-term accrued compensation Long-term accrued income taxes Long-term deferred tax liabilities Other long-term liabilities Total liabilities Shareholders' equity Ordinary shares Retained earnings Accumulated other comprehensive (loss)/income Total shareholders' equity Total liabilities and shareholders' equity 2,185 7,165 30,247 1,759 2,903 3,729 1,916 47,719 1,611 935 119 2,464 9,173 33,752 1,535 2,476 4,700 1,819 53,455 53,931 (1,868) 52,063 $99,782 54,414 (1,184) 53,230 $106,685 a. Use the financial statements along with the additional information below to forecast retained earnings for FY2017. Forecasted net income Dividends to shareholders' in FY2016 $4.972 million 2,139 million Forecasted retained earnings $ 0 million b. Suppose the MD&A section of the Form 10-K and additional guidance from the company reveals the following additional information. 2017 Est. 2016 Actual 2015 Actual Dividends per share $1.72 $1.52 $1.22 At FY2016 year-end (April 29, 2016), the company had approximately 1,400 million shares issued and outstanding. Use this information to refine your forecast of retained earnings for FY2017. Forecasted retained earnings $0 million Refine Assumptions for Dividend and Retained Earnings Forecast Provided below is FY2016 information for Medtronic PLC. Medtronic plc Consolidated Statement of Income ($ millions) Apr. 29, 2016 Net sales $28,833 Costs and expenses Cost of products sold 9,142 Research and development expenses 2,224 Selling general, and administrative expense 9,469 Special charges (gains), net 70 Restructuring charge, net 290 Certain litigation charges, net Acquisition-related items 283 Amortization of intangiable assets 1,931 Other expense, net 107 Operating profit 5,291 Interest expense, net 955 Income from operations before income taxes 4,336 Provision for income taxes 798 Net income $3,538 26 Medtronic plc Consolidated Balance Sheet ($ millions) Apr. 29, 2016 Apr. 24, 2015 Current assets Cash and cash equivalents $2,876 $4,843 Investments 9.758 14,637 Accounts receivable 5,562 5,112 Inventories 3,473 3,463 Tax assets 697 1,335 Prepaid expenses and other current assets 1,234 1,454 Total current assets 23,600 30,844 Property, plant, and equipment, net 4,841 4,699 Goodwill 41,500 40,530 Other intangiable assets, net 26,899 28,101 Long-term tax assets 1,383 774 Other assets 1,559 1,737 Total assets $99,782 $106,685 Current liabilities Short-term borrowing $993 $2,434 Accounts payable 1,709 1,610 Accrued compensation 1,712 1,611 Accrued income taxes 566 935 Deferred tax liabilities 119 Other accrued expenses 2.185 2,464 Total current liabilities 7,165 9,173 Long-term debt 30,247 33,752 1,61U 1,709 1,712 566 Accounts payable Accrued compensation Accrued income taxes Deferred tax liabilities Other accrued expenses Total current liabilities Long-term debt Long-term accrued compensation Long-term accrued income taxes Long-term deferred tax liabilities Other long-term liabilities Total liabilities Shareholders' equity Ordinary shares Retained earnings Accumulated other comprehensive (loss)/income Total shareholders' equity Total liabilities and shareholders' equity 2,185 7,165 30,247 1,759 2,903 3,729 1,916 47,719 1,611 935 119 2,464 9,173 33,752 1,535 2,476 4,700 1,819 53,455 53,931 (1,868) 52,063 $99,782 54,414 (1,184) 53,230 $106,685 a. Use the financial statements along with the additional information below to forecast retained earnings for FY2017. Forecasted net income Dividends to shareholders' in FY2016 $4.972 million 2,139 million Forecasted retained earnings $ 0 million b. Suppose the MD&A section of the Form 10-K and additional guidance from the company reveals the following additional information. 2017 Est. 2016 Actual 2015 Actual Dividends per share $1.72 $1.52 $1.22 At FY2016 year-end (April 29, 2016), the company had approximately 1,400 million shares issued and outstanding. Use this information to refine your forecast of retained earnings for FY2017. Forecasted retained earnings $0 million