The following are the financial statements of Nike, Inc. NIKE INC. Consolidated Income Statement For Year Ended ($millions) May 31, 2016 Revenues $32,376 Cost of sales 17,405 Gross profit 14,971 Demand creation expense 3,278 Operating overhead expense 7,191 Total selling and administrative expense 10,469 Interest expense (income), net 19 Other (income) expense, net (140) Income before income taxes 4,623 Income tax expense 863 Net income $3,760 NIKE INC. Consolidated Balance Sheets millions May 31, 2016 May 31, 2015 Current Assets Cash and equivalents $3,138 $3,852 Short-term investments 2,319 2,072 Accounts receivable, net 3,241 3,358 Inventories 4,838 4,337 Prepaid expenses and other current assets 1,489 1,968 Total current assets 15,025 15,587 Property, plant and equipment, net 3,520 3,011 Identifiable intangible assets (net) 281 281 Goodwill 131 131 Deferred income taxes and other assets 2,439 Total assets $21,396 $21,597 Current liabilities: Current portion of long-term debt $44 $107 Notes payable 74 Accounts payable 2,131 Accrued liabilities 3,037 3,949 Income taxes payable 85 Total current liabilities 5,358 6,332 Long-term debt 2,010 1,079 Deferred income taxes and other liabilities 1,770 1,479 Total liabilities 9,138 Shareholders' Equity Class A covertible common stock 2,587 2,191 71 8,890 Instructions: Forecast Nike's fiscal year 2017 income statement. Assume no change for other income and interest income. Round forecasts to $ millions. Do not use negative signs with your answers in the income statement Nike Inc. Forecasted Statement of Income (in $ millions) 2017 Est Revenues Cost of sales Gross profit Demand creation expense Operating overhead expense Total selling and administrative expense Interest income/expense, net Other income/expense, net Income before income taxes Income tax expense Net income We forecast Nike's balance sheet using the following forecast assumptions: Accounts receivable/Revenues 10.0% Inventories/Revenues 14.9% Prepaid expenses and other current assets/Revenues 4.6% Depreciation expense/Prior-year PPE, net (incl. in overhead) 21.6% Amortization expense $13 L-T deferred income taxes and other assets/Revenues 7.5% Accounts payable/Revenues 6.8% Accrued liabilities/Revenues 9.4% Income taxes payable/Revenues 0.3% Deferred income taxes and other liabilities/Revenues 5.5% Capital expenditures/Revenues 3.5% Dividends/Net income 27.2% Current portion of L/T debt due in 2018 $6 Instructions: Forecast Nike's fiscal year 2017 balance sheet. Assume no change for: short-term investments, goodwill, notes payable, common stock, capital in excess of stated value and accumulated other comprehensive income. Round forecasts to $ millions. Nike Inc. Forecasted Balance Sheet ($ in millions) 2016 Actual 2017 Est. Cash and equivalents $3,138 $ Short-term investments 2,319 Accounts receivable, net 3,241 Inventories 4,838 Prepaid expenses and other current assets 1,489 Total current assets 15,025 Property, plant and equipment, net 3,520 Identifiable intangible assets, net 281 Goodwill 131 Deferred income taxes and other assets 2,439 Total assets $21,396 $ Current portion of long-term debt $44 $ Notes payable Accounts payable 2,191 Accrued liabilities 3,037 Income taxes payable 85 Total current liabilities 5,358 Long-term debt 2,010 Deferred income taxes and other liabilities 1,770 Total liabilities Shareholders' equity: Class A Convertible Common Stock Class B common stock Capital in excess of stated value 7,786 9,138 0 Capital in excess of stated value Accumulated other comprehensive income Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 7,786 318 4,151 12,258 $21,396 $ Instructions: Forecast Nike's fiscal year 2017 stastement of cash flows. Use negative signs with your answers below, when appropriate. NIKE INC. Forecasted Statement of Cash Flows ($ in millions) 2017 Est. Net income Add: depreciation Add: amortization Change in Accounts receivable Change in Inventories Change in Prepaid expenses & other current assets Change in Deferred income taxes and other assets Change in Accounts payable Change in Accrued liabilities Change in Income taxes payable Change in Deferred income taxes and other liabilities Cash from operating CAPEX The following are the financial statements of Nike, Inc. NIKE INC. Consolidated Income Statement For Year Ended ($millions) May 31, 2016 Revenues $32,376 Cost of sales 17,405 Gross profit 14,971 Demand creation expense 3,278 Operating overhead expense 7,191 Total selling and administrative expense 10,469 Interest expense (income), net 19 Other (income) expense, net (140) Income before income taxes 4,623 Income tax expense 863 Net income $3,760 NIKE INC. Consolidated Balance Sheets millions May 31, 2016 May 31, 2015 Current Assets Cash and equivalents $3,138 $3,852 Short-term investments 2,319 2,072 Accounts receivable, net 3,241 3,358 Inventories 4,838 4,337 Prepaid expenses and other current assets 1,489 1,968 Total current assets 15,025 15,587 Property, plant and equipment, net 3,520 3,011 Identifiable intangible assets (net) 281 281 Goodwill 131 131 Deferred income taxes and other assets 2,439 Total assets $21,396 $21,597 Current liabilities: Current portion of long-term debt $44 $107 Notes payable 74 Accounts payable 2,131 Accrued liabilities 3,037 3,949 Income taxes payable 85 Total current liabilities 5,358 6,332 Long-term debt 2,010 1,079 Deferred income taxes and other liabilities 1,770 1,479 Total liabilities 9,138 Shareholders' Equity Class A covertible common stock 2,587 2,191 71 8,890 Instructions: Forecast Nike's fiscal year 2017 income statement. Assume no change for other income and interest income. Round forecasts to $ millions. Do not use negative signs with your answers in the income statement Nike Inc. Forecasted Statement of Income (in $ millions) 2017 Est Revenues Cost of sales Gross profit Demand creation expense Operating overhead expense Total selling and administrative expense Interest income/expense, net Other income/expense, net Income before income taxes Income tax expense Net income We forecast Nike's balance sheet using the following forecast assumptions: Accounts receivable/Revenues 10.0% Inventories/Revenues 14.9% Prepaid expenses and other current assets/Revenues 4.6% Depreciation expense/Prior-year PPE, net (incl. in overhead) 21.6% Amortization expense $13 L-T deferred income taxes and other assets/Revenues 7.5% Accounts payable/Revenues 6.8% Accrued liabilities/Revenues 9.4% Income taxes payable/Revenues 0.3% Deferred income taxes and other liabilities/Revenues 5.5% Capital expenditures/Revenues 3.5% Dividends/Net income 27.2% Current portion of L/T debt due in 2018 $6 Instructions: Forecast Nike's fiscal year 2017 balance sheet. Assume no change for: short-term investments, goodwill, notes payable, common stock, capital in excess of stated value and accumulated other comprehensive income. Round forecasts to $ millions. Nike Inc. Forecasted Balance Sheet ($ in millions) 2016 Actual 2017 Est. Cash and equivalents $3,138 $ Short-term investments 2,319 Accounts receivable, net 3,241 Inventories 4,838 Prepaid expenses and other current assets 1,489 Total current assets 15,025 Property, plant and equipment, net 3,520 Identifiable intangible assets, net 281 Goodwill 131 Deferred income taxes and other assets 2,439 Total assets $21,396 $ Current portion of long-term debt $44 $ Notes payable Accounts payable 2,191 Accrued liabilities 3,037 Income taxes payable 85 Total current liabilities 5,358 Long-term debt 2,010 Deferred income taxes and other liabilities 1,770 Total liabilities Shareholders' equity: Class A Convertible Common Stock Class B common stock Capital in excess of stated value 7,786 9,138 0 Capital in excess of stated value Accumulated other comprehensive income Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 7,786 318 4,151 12,258 $21,396 $ Instructions: Forecast Nike's fiscal year 2017 stastement of cash flows. Use negative signs with your answers below, when appropriate. NIKE INC. Forecasted Statement of Cash Flows ($ in millions) 2017 Est. Net income Add: depreciation Add: amortization Change in Accounts receivable Change in Inventories Change in Prepaid expenses & other current assets Change in Deferred income taxes and other assets Change in Accounts payable Change in Accrued liabilities Change in Income taxes payable Change in Deferred income taxes and other liabilities Cash from operating CAPEX