Use Segment Disclosures to Forecast Income Statement Use Segment Diaclogures to Forecast Income Statement

Following are revenue and cost of revenue numbers for Thermo Fisher Scientific.

Note: Complete the entire queation using the following Excel template: Excel Template. Then enter the answers into the provided spaces below with two decimal places. decimal places$\_$

Note: Use negative signs with answers, when appropriate. Assume other forecast assumptions are as in part a

decimal places$\_$

Note: Use negative signs with answers, when appropriate.

Following are revenue and cost of revenue numbers for Thermo Fisher Scientific.

Note: Complete the entire question using the following Excel template: Excel Template. Then enter the answers into the provided spaces below with two decimal places.

THERMO FISHER SCIENTIFIC INC.

Consolidated Statement of Income

For Year Ended December $31($$ millions$)20182017$

Revenues

Product revenues $$18,868$ $$17,374$

Service revenues $5,4903,544$

Total revenues $24,35820,918$

Costs and operating expenses

Product cost of revenues $9,6828,975$

Service cost of revenues $3,8192,495$

Total cost of revenues $13,50111,470$

Selling, general and administrative expenses $6,0575,504$

Research and development expenses $967887$

Restructuring and other costs, net $5097$

Total costs and operating expenses $20,57517,958$

Operating income $3,7832,960$

Other expense, net $(521)(531)$

Income from continuing operations before income taxes $3,2622,429$

Income tax expense $324201$

Income from continuing operations $2,9382,228$

Loss from discontinued operations $0(3)$

Net income $$2,938$ $$2,225$

Assumptions

Selling, general and administrative expenses $24\mathrm{.}9\%$ of total revenues

Research and development expenses $4\%$ of total revenues

Restructuring and other costs, net $$0$

Other expense, net No change

Income tax expense $23\%$ of pretax income

part a$.$

part b$.$

part c$.$

b$.$ Refine your forecast by using the separate historic growth in product revenues and service revenues $($from $2017$ to $2018)$ to estimate $2019$ product and service revenues respectively for $2019.$ Also, use the historic growth in cost of revenues for each segment to forecast separate segment cost of revenues. Assume other forecast assumptions are as in part a$.$

Note: Complete the entire question in Excel $($template provided above$).$ Using Excel, format each answer to two decimal places. Use Increase Decimal or Decrease Decimal to adjust decimal places. Do not round answers. Then enter the answers into the provided spaces below with $\_$two decimal places$\_.$

Note: Use negative signs with answers, when appropriate.

Thermo Fisher Scientific

Forecasted Income Statement

Dec. $31,2019$

Forecast

Revenues

Product Revenues Answer $12$

$20,558\mathrm{.}55$

Service Revenues Answer $13$

$4,743\mathrm{.}02$

Total Revenues Answer $14$

$25,301\mathrm{.}57$

Cost and Operating Expenses

Product Cost of revenues Answer $15$

$10,164\mathrm{.}14$

Service Cost of revenues Answer $16$

$3,408\mathrm{.}45$

Total cost of revenue Answer $17$

$13,572\mathrm{.}59$

Selling, general and administrative expenses Answer $18$

$6,300\mathrm{.}49$

Research and development expenses Answer $19$

$1,012\mathrm{.}06$

Restructuring and other costs, net Answer $20$

$20,942\mathrm{.}14$

Total costs and operating expenses Answer $21$

$20,942\mathrm{.}14$

Operating Income Answer $22$

$4,359\mathrm{.}43$

Other Expense, Net Answer $23$

$282$

Income from Continuing Operations Before Income Taxes Answer $24$

$4,077\mathrm{.}43$

Income tax expense Answer $25$

$937\mathrm{.}81$

Net Income Answer $26$

$3,139\mathrm{.}62$