York Inc is a consumer products firm listed in the US stock markets. Its Balance Sheet and Income Statements for the years ending 2019 and 2018 are given below. The Reformulated Statement of Stockholders Equity for the years ending 2019 and 2018 are given below.

Notes:

The firm bears a 35% statutory tax rate.

Working cash is estimated to be $120 million and $115 million for 2019 and 2018 respectively.

Notes receivable bear interest of 8% per calendar year.

Question

Prepare the Reformulated Balance Sheet and Income Statements for the years 2019 and 2018 in preparation for valuation.

Comment on what the reformulated financial statements tell you about Yorks strategy. (200-300 words)

Dec. 31, 2019 Dec. 31, 2018 958 3,079 242 1,091 2,966 262 2,848 224 203 7,594 10,027 449 2,884 386 430 868 22,638 2,440 163 155 7,037 9,640 426 2,730 372 728 918 21,851 YORK INC. BALANCE SHEETS Consolidated Balance Sheet in USD millions Current Assets Cash and cash equivalente Accounts receivable, net- Notes receivable Inventories Deferred income taxes Other current assetse Total Current Assets Property, plant and Equipment, nete Investments in Equity Companies Goodwille Other Intangible Assetse Long-Term Notes Receivable Other Assets Total Assets Current Liabilities Debt payable within one year Trade accounts payable Accrued expenses Accrued income taxes Dividends payable Total Current Liabilities Long-Term Debt Noncurrent Employee Benefits Deferred Income Taxes Other Liabilitiese Stockholders' Equity Preferred stock - 10 million shares outstandinge Common stock - 708 million shares outstandinge Additional paid-in capitale Common stock held in treasury-70 million sharese Accumulated other comprehensive income (loss) Retained earnings Total Stockholders' Equity available to CSE Noncontrolling interests Total Stockholders' Equity Liabilities and Stockholders' Equity, Totale 293 3,903 1,331 125 323 5,975 5,784 2,412 755 269 732 3,565 1,277 95 300 5,969 5,750 2,387 654 262 10 708 510 (5,671) (1,759) 13,303 7,101 10 708 479 (4,904) (2,200) 12,395 6,488 341 6,829 21,851 342 7,443 22,638 5,795 490 (1,107) (1,458) (2,075) Reformulated Statement of Stockholders Equity (in USD millions) Balance at December 31, 2017 Transactions with Shareholders Stock issues for stock options Stock repurchases Cash Dividende Total Transactions with Shareholders Comprehensive income Net income reported Net translation gain (loss) Pension adjustment Othere Total Comprehensive income for 2018 Balance at December 31, 2018 ; 2,2616 743 (38) 92 3,058 6,778 e 6,778 178 (971) (1,279) (2,072) Balance at December 31, 2018 Transactions with Shareholders Stock issues for stock options Stock repurchases Cash Dividende Total Transactions with Shareholders Comprehensive income Net income reported Net translation gain (los) Pension adjustmente Other Total Comprehensive income for 2019 Balance at December 31, 2019 2,210 391 68 39 2,708 7,414 1. YORK INC. INCOME STATEMENTS Consolidated Income Statement 3,390 in USD millions, except per share data Net Sales Cost of goods sold Gross Profit Sales and general expenses Other (income) and expense, net Operating Profit Interest income Interest expense Income before tax and other operating income Provision for income taxes Income before other operating income Share of net income of equity companies Net Income Net income attributable to NCI Net Income Attributable to Common Earnings Per Share Basice Net Income Attributable to Common Dilutede Net Income Attributable to Common 12 Months Ended Dec. 31, Dec. 31, 2019 2018 23,815 22,938 15,835 15,234 7,980 7,704 4,528 4,198 185 116 3,267 24 31 (292) (330) 2,999 3,091 (946) (895) 2,053 2,196 277 1974 2,330 2,393 (120) (132) 2,210 2,261 3.12 3.19 2 3.09 3.164 Dec. 31, 2019 Dec. 31, 2018 958 3,079 242 1,091 2,966 262 2,848 224 203 7,594 10,027 449 2,884 386 430 868 22,638 2,440 163 155 7,037 9,640 426 2,730 372 728 918 21,851 YORK INC. BALANCE SHEETS Consolidated Balance Sheet in USD millions Current Assets Cash and cash equivalente Accounts receivable, net- Notes receivable Inventories Deferred income taxes Other current assetse Total Current Assets Property, plant and Equipment, nete Investments in Equity Companies Goodwille Other Intangible Assetse Long-Term Notes Receivable Other Assets Total Assets Current Liabilities Debt payable within one year Trade accounts payable Accrued expenses Accrued income taxes Dividends payable Total Current Liabilities Long-Term Debt Noncurrent Employee Benefits Deferred Income Taxes Other Liabilitiese Stockholders' Equity Preferred stock - 10 million shares outstandinge Common stock - 708 million shares outstandinge Additional paid-in capitale Common stock held in treasury-70 million sharese Accumulated other comprehensive income (loss) Retained earnings Total Stockholders' Equity available to CSE Noncontrolling interests Total Stockholders' Equity Liabilities and Stockholders' Equity, Totale 293 3,903 1,331 125 323 5,975 5,784 2,412 755 269 732 3,565 1,277 95 300 5,969 5,750 2,387 654 262 10 708 510 (5,671) (1,759) 13,303 7,101 10 708 479 (4,904) (2,200) 12,395 6,488 341 6,829 21,851 342 7,443 22,638 5,795 490 (1,107) (1,458) (2,075) Reformulated Statement of Stockholders Equity (in USD millions) Balance at December 31, 2017 Transactions with Shareholders Stock issues for stock options Stock repurchases Cash Dividende Total Transactions with Shareholders Comprehensive income Net income reported Net translation gain (loss) Pension adjustment Othere Total Comprehensive income for 2018 Balance at December 31, 2018 ; 2,2616 743 (38) 92 3,058 6,778 e 6,778 178 (971) (1,279) (2,072) Balance at December 31, 2018 Transactions with Shareholders Stock issues for stock options Stock repurchases Cash Dividende Total Transactions with Shareholders Comprehensive income Net income reported Net translation gain (los) Pension adjustmente Other Total Comprehensive income for 2019 Balance at December 31, 2019 2,210 391 68 39 2,708 7,414 1. YORK INC. INCOME STATEMENTS Consolidated Income Statement 3,390 in USD millions, except per share data Net Sales Cost of goods sold Gross Profit Sales and general expenses Other (income) and expense, net Operating Profit Interest income Interest expense Income before tax and other operating income Provision for income taxes Income before other operating income Share of net income of equity companies Net Income Net income attributable to NCI Net Income Attributable to Common Earnings Per Share Basice Net Income Attributable to Common Dilutede Net Income Attributable to Common 12 Months Ended Dec. 31, Dec. 31, 2019 2018 23,815 22,938 15,835 15,234 7,980 7,704 4,528 4,198 185 116 3,267 24 31 (292) (330) 2,999 3,091 (946) (895) 2,053 2,196 277 1974 2,330 2,393 (120) (132) 2,210 2,261 3.12 3.19 2 3.09 3.164