Analyzing, Forecasting, and Interpreting Both Income Statement and Balance Sheet

Following are the income statement and balance sheet of Seagate Technology for fiscal $2019.$

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.

SEGATE TECHNOLOGY PLC

Consolidated Statement of Income

For Year Ended June $28,2019,$ $ millions

Revenue $$6,857$

Cost of revenue $4,922$

Product development $654$

Marketing and administrative $299$

Amortization of intangibles $15$

Restructuring and other, net $(15)$

Total operating expenses $5,875$

Income from operations $982$

Interest income $55$

Interest expense $(148)$

Other, net $17$

Other expense, net $(76)$

Income before income taxes $906$

$($Benefit$)$ provision for income taxes $(422)$

Net income $$1,328$

SEAGATE TECHNOLOGY PLC Consolidated Balance Sheet

Consolidated Balance Sheet

$ millions June $28,2019$

Current assets

Cash and cash equivalents $$1,465$

Accounts receivable, net $653$

Inventories $640$

Other current assets $121$

Total current assets $2,879$

Property, equipment and leasehold improvements, net $1,234$

Goodwill $816$

Other intangible assets, net $73$

Deferred income taxes $735$

Other assets, net $126$

Total assets $$5,863$

Current liabilities

Accounts payable $$937$

Accrued employee compensation $112$

Accrued warranty $60$

Accrued expenses $364$

Total current liabilities $1,473$

Long$-$term accrued warranty $69$

Long$-$term accrued income taxes $.3$

Other noncurrent liabilities $86$

Long$-$term debt, less current portion $2,807$

Total liabilities $4,438$

Shareholders$$ equity

Ordinary shares$$ par value $$0\mathrm{.}0001,2\mathrm{.}6$ billion shares authorized, $1,340,697,595$ and

$1,354,218,154$ shares issued and outstanding, respectively $0$

Additional paid$-$in capital $4,329$

Accumulated other comprehensive loss $(34)$

Accumulated deficit $(2,870)$

Total shareholders' equity $1,425$

Total liabilities and shareholders' equity $$5,863$

Forecast Seagate Technology$$s $2020$ income statement using the following forecast assumptions, which are expressed as a percentage of revenue unless otherwise indicated.

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.

Assumptions

Revenue growth $5\%$ growth

Cost of revenue $71\mathrm{.}8\%$ of revenue

Product development $9\mathrm{.}5\%$ of revenue

Marketing and administrative $4\mathrm{.}4\%$ of revenue

Amortization of intangibles No change

Restructuring and other, net $$0$ million

Interest income No change

Interest expense No change

Other, net No change

Income tax rate $21\%$

SEGATE TECHNOLOGY PLC

Consolidated Statement of Income

$ millions June $2020$

Revenue Answer

$7,200$

Cost of revenue Answer

$5,169$

Product development Answer

$684$

Marketing and administrative Answer

$317$

Amortization of intangibles Answer

$15$

Restructuring and other, net Answer

$0$

Total operating expenses Answer

$6,185$

Income from operations Answer

$1,015$

Interest income Answer

$55$

Interest expense Answer

$148$

Other, net Answer

$17$

Other expense, net Answer

$76$

Income before income taxes Answer

$939$

$($Benefit$)$ provision for income taxes Answer

$197$

Net income Answer

$742$

Forecast Seagate Technology$$s $2020$ balance sheet using the following forecast assumptions, which are expressed as a percentage of revenue unless otherwise indicated.

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.

Assumptions

Accounts receivable, net $9\mathrm{.}5\%$ of revenue

Inventories $9\mathrm{.}3\%$ of revenue

Other current assets $1\mathrm{.}8\%$ of revenue

Deferred income taxes $10\mathrm{.}7\%$ of revenue

Other assets, net $1\mathrm{.}8\%$ of revenue

Accounts payable $13\mathrm{.}7\%$ of revenue

Accrued employee compensation $1\mathrm{.}6\%$ of revenue

Accrued warranty $0\mathrm{.}9\%$ of revenue

Accrued expenses $5\mathrm{.}3\%$ of revenue

Long$-$term accrued warranty $1\mathrm{.}0\%$ of revenue

Other noncurrent liabilities $1\mathrm{.}3\%$ of revenue

Goodwill No change

Long$-$term accrued income taxes No change

Long$-$term debt, less current portion No change

Ordinary Shares No change

Accumulated other comprehensive loss No change

CAPEX $5\mathrm{.}8\%$ of revenue

Depreciation expense $5\mathrm{.}4\%$ of beginning Property, equipment and leasehold improvements, gross

Beginning Property, equipment and leasehold improvements, gross $$6,491$ million

Stock$-$based compensation $$99$ million, increases Capital in excess of par value by the same amount. Assume that the company routinely includes this form of compensation in operating expenses each year.

Dividen