Consider the following income statement and balance sheet information. Income Statement (in millions) Net sales Cost...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consider the following income statement and balance sheet information. Income Statement (in millions) Net sales Cost of products sold Amortization of intangible assets Research & development Selling, general & administrative Operating earnings (loss) Interest income (expense) Other income (expense) Earnings (loss) from continuing operations before taxes Provision for income taxes Net earnings (loss) Balance Sheet (summary as of 12/31/2021, in millions) • Operating assets: $24,280.0 • Nonoperating assets: $1,580.0 • Operating liabilities: $6,290.0 . • Nonoperating liabilities: $7,740.0 The following additional information is provided: • Revenue growth in 2022-2025: 4.0% . Terminal growth: 2.0% • Statutory tax rate (federal and state combined) for all years: 22.0% Revenue: 12/31/2021 $11,770.0 4,890.0 840.0 890.0 3,750.0 1,400.0 (250.0) (20.0) 1,130.0 Use the parsimonious forecasting method to forecast total revenue, net operating profit after tax (NOPAT), and net operating assets (NOA) for years 2022 through 2023. Recall that the parsimonious method presumes that 2021 NOPAT and NOA (as a percentage of revenue) are used to forecast future amounts. Assume that all items on the 2021 income statement will persist. Enter your responses below. Do not round intermediate calculations. $ millions 2022 [Select] Net operating profit after tax (NOPAT): 190.0 $940.0 Net operating assets (NOA): [Select] ✔ [Select] ✔ 2023 [Select] ✔ [Select] ✔ [Select] ✔ Consider the following income statement and balance sheet information. Income Statement (in millions) Net sales Cost of products sold Amortization of intangible assets Research & development Selling, general & administrative Operating earnings (loss) Interest income (expense) Other income (expense) Earnings (loss) from continuing operations before taxes Provision for income taxes Net earnings (loss) Balance Sheet (summary as of 12/31/2021, in millions) • Operating assets: $24,280.0 • Nonoperating assets: $1,580.0 • Operating liabilities: $6,290.0 . • Nonoperating liabilities: $7,740.0 The following additional information is provided: • Revenue growth in 2022-2025: 4.0% . Terminal growth: 2.0% • Statutory tax rate (federal and state combined) for all years: 22.0% Revenue: 12/31/2021 $11,770.0 4,890.0 840.0 890.0 3,750.0 1,400.0 (250.0) (20.0) 1,130.0 Use the parsimonious forecasting method to forecast total revenue, net operating profit after tax (NOPAT), and net operating assets (NOA) for years 2022 through 2023. Recall that the parsimonious method presumes that 2021 NOPAT and NOA (as a percentage of revenue) are used to forecast future amounts. Assume that all items on the 2021 income statement will persist. Enter your responses below. Do not round intermediate calculations. $ millions 2022 [Select] Net operating profit after tax (NOPAT): 190.0 $940.0 Net operating assets (NOA): [Select] ✔ [Select] ✔ 2023 [Select] ✔ [Select] ✔ [Select] ✔
Expert Answer:
Answer rating: 100% (QA)
Calculate the forecasted revenue NOPAT and NOA for 2022 and 2023 Lets calculate Step 1 NOPAT Percent... View the full answer
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
Posted Date:
Students also viewed these accounting questions
-
In Problem 10.16, we projected financial statements for Walmart Stores, Inc. (Walmart) for Years +1 through +5. The data in Exhibits 12.17-12.19 (pages 948-950) include the actual amounts for 2012...
-
The following income statement and balance sheet information are available for two firms, Firm A and Firm B. (a) Calculate the amount of dividends Firm A and Firm B paid using the information given....
-
Use the following income statement and balance sheet information to put together a statement of cash flows. 2013 Assets 2012 S25,000 $21,990 2013 Sales S1,230,000 Cash Accounts receivable Cost of...
-
With a global economy, the only way to achieve cost-effective control of greenhouse gases is to assure that every country imposes the same universal set of emissions standards. Discuss.
-
A furnace with a long isothermal graphite tube of diameter D = 12.5 mm is maintained at Tf = 2000 K and is used as a blackbody source to calibrate heat flux gages. Traditional heat flux gages are...
-
Suppose that Chino Material Systems Inc. sells a low-quality, short-life system. a. Assuming a 12 percent cost of capital, what are this projects NPV and its IRR? Be sure to talk about (1) mutually...
-
Define a vertical restraint on trade, and contrast this definition with that of a horizontal restraint on trade. Which type of restraint is considered to be a greater threat to competition under the...
-
Canned fruits and vegetables are the main products made by Good Foods, Inc. All direct materials are added at the beginning of the Mixing Department's process. When the ingredients have been mixed,...
-
19. Find the tension T for the system shown in figure :- T T T 1 kg 2 kg 3 kg (1) IgN (2) 2 gN (3) 5 gN (4) 6 gN 20. A ball of mass 0.5 kg moving with a velocity of 2 m/sec strikes a wall normally...
-
Sears Editing Company is a small editorial services company owned and operated by Deloris Sears. On January 31, 20Y1, the end of the current year, Sears Editing Companys accounting clerk prepared the...
-
Consider the following pool of mortgages: 100 mortgages each with initial balance of $291297, interest rate 2.2%, issued for 30 years with monthly payments 80 mortgages each with initial balance of...
-
Why should you respond when you receive a congratulatory note or some other written pat on the back and how?
-
As an assistant to Pamela Eyring, you must help her refuse an invitation to speak at Wysocki College in Boston. The business associations on campus pooled their resources and decided to invite Ms....
-
As you have seen in this chapter, some businesses seek to protect themselves from negative online reviews by slipping nondisparagement clauses into their terms of service. Then, in some cases, they...
-
Why is it smart to remain cool when making a claim, and how should one go about it?
-
What might be some advantages and disadvantages to being let go remotely, if any? Why might it be a good idea to rein in ones frustration and anger?
-
A bag of Hershey kisses contains the following information: Serving size: 6 pieces = 31g Calories per serving: 350 Total fat per serving: 12g Note: 1 lb = 16oz 1 oz = 28.35 g a.) The bag contains 2.0...
-
Find a least expensive route, in monthly lease charges, between the pairs of computer centers in Exercise 11 using the lease charges given in Figure 2. a) Boston and Los Angeles b) New York and San...
-
Clearview Productions is a publicly held company whose common stock has recently been selling for $ 50.00 a share. The firm is expected to pay an annual cash dividend of $ 5.00 a share next year, and...
-
Which of the following sources of new earnings volatility represents the effect of business versus financial risk (discuss the rationale for your decisions): a. Amos Gooding Real Estate Company...
-
What are common reasons for capital rationing? Is capital rationing rational?
-
True or False: Inflation decreases the purchasing power of money.
-
Logan is conducting an economic evaluation under inflation using the then-current approach. If the inflation rate is \(j\) and the real time value of money rate is \(d\), which of the following is...
-
True or False: The most commonly used measure of inflation is the relative change in the Consumer Price Index.
Study smarter with the SolutionInn App