Question 1

Ongoing Analysis Project

An important part of learning is application. To learn accounting, we must practice the skills taught and apply those skills to real-world problems. To that end, we have designed a project to reinforce the lessons in each module and apply them to real world companies. By working through the questions in each module, you will complete a comprehensive analysis of two publicly traded companies that operating in roughly the same industry: Parker Hannifin and Illinois Tool Works. Questions require you to calculate and interpret a wide range of ratios. In later modules, you will create a set of forecasted financial statements for each company and then estimate a value for each company's equity. The analysis in this project is similar to the analysis performed by financial analysts, lenders, and investors. You might not aspire to those roles, but by completing a project of this magnitude, you will have mastered financial reporting at a sufficient level to be able to step into any role in an organization.

Obtain financial statements

• Download the 2022 Excel financial statements for each company.

Park HannifinIllinois Tool Works

• Download each company's 2022 annual report.

Park HannifinIllinois Tool Works NOTE: You might notice some small differences between the financials in the Excel spreadsheets and those in the annual reports. The Excel version has been prepared for learning purposes and differ from the annual reports in a few places. One difference is the Excel balance sheet includes four years as compared to the two years presented in the annual report. We added more years so that you can calculate ratios for three years (more about that later). Other differences relate to presentation and style. For example, neither company includes a line for "Gross profit" in their income statement and Parker Hannifin also omitted a line for "Operating income." The Excel spreadsheet shows those two items (and others) to make the financial statements consistent with the textbook examples and with the other company.

For your submitted work, you should ALWAYS use the Excel version of the financial statements so that your answers are consistent with the solutions provided.

Balance sheet analysis

Using the balance sheet tab in the Excel financial statements files, prepare a common-size balance sheet for each company. Express each line on the balance sheet as a percent of total assets. Do this for all years on the balance sheet. Look for major differences over time and between the companies. Use the common size balance sheet to answer the following questions. (a) What are the company's two largest assets in 2022 ranked in order and their respective percentage shares of the total assets? Note: Round to the nearest whole percentage point; for example, enter 60 for 60.4% or 61 for 60.5%.

	Ranking	Parker Hannifin
	#1	Answer 1 Choose the correct account Cash and equivalents Trade receivables Inventories Prepaid expenses and other current assets Assets held for sale Net plant and equipment GoodwillIntangible assets Deferred income taxes - asset Other assetsShort-term debt Accounts payable Current portion of operating lease liabilities Accrued expenses Cash dividends payable Income taxes payable Liabilities held for sale Long-term debt Deferred income taxes - liabilities Noncurrent income taxes payable Long-term portion of operating lease liabilities Other liabilitiesCommon stock Additional paid-in-capital Retained earningsCommon stock held in treasury Accumulated other comprehensive income (loss) Equity attributable to ITW stockholders Noncontrolling interest	Answer 2
	#2	Answer 3 Choose the correct account Cash and equivalents Trade receivables Inventories Prepaid expenses and other current assets Assets held for sale Net plant and equipment GoodwillIntangible assets Deferred income taxes - asset Other assetsShort-term debt Accounts payable Current portion of operating lease liabilities Accrued expenses Cash dividends payable Income taxes payable Liabilities held for sale Long-term debt Deferred income taxes - liabilities Noncurrent income taxes payable Long-term portion of operating lease liabilities Other liabilitiesCommon stock Additional paid-in-capital Retained earningsCommon stock held in treasury Accumulated other comprehensive income (loss) Equity attributable to ITW stockholders Noncontrolling interest	Answer 4

	Ranking	Illinois Tool Works
	#1	Answer 5 Choose the correct account Cash and equivalents Trade receivables Inventories Prepaid expenses and other current assets Assets held for sale Net plant and equipment GoodwillIntangible assets Deferred income taxes - asset Other assetsShort-term debt Accounts payable Current portion of operating lease liabilities Accrued expenses Cash dividends payable Income taxes payable Liabilities held for sale Long-term debt Deferred income taxes - liabilities Noncurrent income taxes payable Long-term portion of operating lease liabilities Other liabilitiesCommon stock Additional paid-in-capital Retained earningsCommon stock held in treasury Accumulated other comprehensive income (loss) Equity attributable to ITW stockholders Noncontrolling interest	Answer 6
	#2	Answer 7 Choose the correct account Cash and equivalents Trade receivablesInventories Prepaid expenses and other current assets Assets held for sale Net plant and equipment GoodwillIntangible assets Deferred income taxes - asset Other assets Short-term debt Accounts payable Current portion of operating lease liabilities Accrued expenses Cash dividends payable Income taxes payable Liabilities held for sale Long-term debt Deferred income taxes - liabilities Noncurrent income taxes payable Long-term portion of operating lease liabilities Other liabilities Common stock Additional paid-in-capital Retained earnings Common stock held in treasury Accumulated other comprehensive income (loss) Equity attributable to ITW stockholders Noncontrolling interest	Answer 8

(b) What is the company's largest liability in 2022 and its percentage of the total assets? Note: Round to the nearest whole percentage point; for example, enter 60 for 60.4% or 61 for 60.5%.

	Parker Hannifin
	Answer 9 Choose the correct account Cash and cash equivalents Marketable securities and other investments Trade accounts receivable, net Non-trade and notes receivableInventories Prepaid expenses and other Property, plant and equipment, net Deferred income taxes - assetInvestments and other assets Intangible assets, net Goodwill Notes payable and long-term debt payable within one year Accounts payable, trade Accrued payrolls and other compensation Accrued domestic and foreign taxes Current operating lease liabilities Other accrued liabilities Long-term debt Pensions and other postretirement benefits Deferred income taxes - liabilities Long-term operating lease liabilities Other liabilities Serial preferred stock Common stock Additional capital Retained earnings Accumulated other comprehensive (loss)Treasury stock Noncontrolling interests	Answer 10

	Illinois Tool Works
	Answer 11 Choose the correct account Cash and equivalentsTrade receivablesInventories Prepaid expenses and other current assets Assets held for sale Net plant and equipment GoodwillIntangible assets Deferred income taxes - asset Other assetsShort-term debt Accounts payable Current portion of operating lease liabilities Accrued expenses Cash dividends payable Income taxes payable Liabilities held for sale Long-term debt Deferred income taxes - liabilities Noncurrent income taxes payable Long-term portion of operating lease liabilities Other liabilities Common stock Additional paid-in-capital Retained earnings Common stock held in treasury Accumulated other comprehensive income (loss) Equity attributable to ITW stockholders Noncontrolling interest	Answer 12

(c) What proportion of total assets is financed by owners in 2022? (Hint: Compare total equity to assets.) Note: Round to the nearest whole percentage point; for example, enter 60 for 60.4% or 61 for 60.5%.

	Parker Hannifin:	Answer 13
	Illinois Tool Work:	Answer 14

(d) What proportion of total assets is financed by nonowners in 2022? Note: Round to the nearest whole percentage point; for example, enter 60 for 60.4% or 61 for 60.5%.

	Parker Hannifin:	Answer 15
	Illinois Tool Work:	Answer 16

Question 2

Income Statement Analysis Using the income statement tab in the Excel financial statements files, prepare a common-size income statement for each company. Express each item on the income statement as a percent of total sales or revenue. Do this for all years on the income statement. Look for major differences over time and between the companies. (a) What are the company's two largest expenses in 2022 ranked in order and their respective percentages of total sales? Note: Round to the nearest whole percentage point; for example, enter 60 for 60.4% or 61 for 60.5%.

	Ranking	Parker Hannifin
	#1	Answer 1Cost of salesSelling, general and administrative expensesGain on disposal of assetsInterest expenseLoss on forward contractsOther expense (income), netIncome taxes	Answer 2
	#2	Answer 3Cost of salesSelling, general and administrative expensesGain on disposal of assetsInterest expenseLoss on forward contractsOther expense (income), netIncome taxes	Answer 4

	Ranking	Illinois Tool Works
	#1	Answer 5 Choose the correct account Cost of revenue Selling, administrative, and research and development expenses Amortization and impairment of intangible assets Interest expense Other (income) expense Income taxes did not have any	Answer 6
	#2	Answer 7 Choose the correct account Cost of revenue Selling, administrative, and research and development expenses Amortization and impairment of intangible assets Interest expense Other (income) expense Income taxes did not have any	Answer 8

(b) Are there any unusual or discontinued items in 2022? If there are multiple items, please identify the largest one in magnitude.

Parker Hannifin:

Answer 9 Choose the correct answer Yes, cost of sales is an unusual or discontinued item. Yes, selling, general and administrative expenses is an unusual or discontinued item. Yes, gain on disposal of assets is an unusual or discontinued item. Yes, interest expense is an unusual or discontinued item. Yes, loss on forward contracts is an unusual or discontinued item. Yes, other expense (income), net is an unusual or discontinued item. No, did not have any unusual or discontinued item.

Illinois Tool Works:

Answer 10 Choose the correct answer Yes, cost of revenue is an unusual or discontinued item. Yes, selling, administrative, and research and development expenses is an unusual or discontinued item. Yes, amortization and impairment of intangible assets is an unusual or discontinued item. Yes, interest expense is an unusual or discontinued item. Yes, other (income) expense is an unusual or discontinued item. Yes, income taxes is an unusual or discontinued item. No, did not have any unusual or discontinued item.

(c) Was the company more or less profitable (as a % of sales) when compared with the prior year? Note: Enter the percent rounded to one digit after the decimal; for example, enter 8.4 for 8.44%, or 8.5 for 8.45%.

In 2022, Parker Hannifin was Answer 11 more/less profitable than it was in 2021. Net income was Answer 12 % and Answer 13 % of revenue in those years respectively.

In 2022, Illinois Tool Works was Answer 14 more/less profitable than it was in 2021. Net income was Answer 15 % and Answer 16 % of revenue in those years respectively.

Question 3

Statement of Cash Flows Analysis Determine the size and direction (cash source or use) of cash flows from operations, investing, and financing. One goal is to understand the company's pattern of cash flows. Complete the cash flow boxes below to better understand the cash flow pattern across the three years. Note: Use negative signs with answers when appropriate.

• Parker Hannifin
• Illinois Tool Works

Parker Hannifin ($ thousands)
	June 30, 2022	June 30, 2021	June 30, 2020
Cash flows from operations	Answer 1	Answer 2	Answer 3
Cash from investing activities	Answer 4	Answer 5	Answer 6
Cash from financing activities	Answer 7	Answer 8	Answer 9
Effect of exchange rate changes on cash	Answer 10	Answer 11	Answer 12
Total cash flow for the year
Cash at start of year	Answer 13	Answer 14	Answer 15
Cash at end of year

Illinois Tool Works ($ millions)
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Cash flow from operations	Answer 16	Answer 17	Answer 18
Cash flow from investing	Answer 19	Answer 20	Answer 21
Cash flow from financing	Answer 22	Answer 23	Answer 24
Effect of exchange rate changes on cash	Answer 25	Answer 26	Answer 27
Total cash flow for the year
Cash at start of year	Answer 28	Answer 29	Answer 30
Cash at end of year

Question 4

Financial Statements Articulation Complete the financial statement articulation for 2021-2022. Use Exhibit 2.5 as a reference as you complete the articulation. Note: Use negative signs with answers when appropriate.

• Parker Hannifin
• Illinois Tool Works

Parker Hannifin ($ thousands)
Balance Sheet	Statement of Cash Flows	Balance Sheet
June 30, 2021	For the Year Ended June 30, 2022	June 30, 2022
Cash	Answer 1	Operating Cash Flows	Answer 2	Cash	Answer 3
Noncash assets	Answer 4	Investing Cash Flows	Answer 5	Noncash assets	Answer 6
Total assets		Financing Cash Flows (including ForEx)	Answer 7	Total assets
Total liabilities	Answer 8	Net change in cash		Total liabilities	Answer 9
Contributed capital	Answer 10	Cash balance, June 30, 2021	Answer 11	Contributed capital	Answer 12
Retained earnings	Answer 13	Cash balance, June 30, 2022		Retained earnings	Answer 14
Treasury stock	Answer 15			Treasury stock	Answer 16
AOCI (L)	Answer 17			AOCI (L)	Answer 18
Noncontrolling interest	Answer 19			Noncontrolling interest	Answer 20
Total equity				Total equity
Liabilities and equity				Liabilities and equity

Parker Hannifin ($ thousands)
Income Statement	Statement of Shareholders' Equity
For Year Ended June 30, 2022	For Year Ended June 30, 2022
Revenues	Answer 21	Contributed capital
Expenses	Answer 22	June 30, 2021	Answer 23
Net earnings		Stock issuance and other	Answer 24
		June 30, 2022
		Retained earnings
		June 30, 2021	Answer 25
		Net income	Answer 26
		Dividends and other changes	Answer 27
		June 30, 2022
		Treasury stock
		June 30, 2021	Answer 28
		Stock (repurchases) re-issuances	Answer 29
		June 30, 2022
		AOCI (L)
		June 30, 2021	Answer 30
		Comprehensive income (loss)	Answer 31
		June 30, 2022
		Noncontrolling interest
		June 30, 2021	Answer 32
		Change in noncontrolling interest	Answer 33
		June 30, 2022

Illinois Tool Works ($ millions)
Balance Sheet	Statement of Cash Flows	Balance Sheet
December 31, 2021	For the Year Ended December 31, 2022	December 31, 2022
Cash	Answer 34	Operating Cash Flows	Answer 35	Cash	Answer 36
Noncash assets	Answer 37	Investing Cash Flows	Answer 38	Noncash assets	Answer 39
Total assets		Financing Cash Flows (including ForEx)	Answer 40	Total assets
Total liabilities	Answer 41	Net change in cash		Total liabilities	Answer 42
Contributed capital	Answer 43	Cash balance, December 31, 2021	Answer 44	Contributed capital	Answer 45
Retained earnings	Answer 46	Cash balance, December 31, 2022		Retained earnings	Answer 47
Treasury stock	Answer 48			Treasury stock	Answer 49
AOCI (L)	Answer 50			AOCI (L)	Answer 51
Noncontrolling interest	Answer 52			Noncontrolling interest	Answer 53
Total equity				Total equity
Total liabilities and equity				Total liabilities and equity

Illinois Tool Works ($ millions)
Income Statement	Statement of Shareholders' Equity
For Year Ended December 31, 2022	For Year Ended December 31, 2022
Revenues	Answer 54	Contributed capital
Expenses	Answer 55	December 31, 2021	Answer 56
Net earnings		Stock issuance and other	Answer 57
		December 31, 2022
		Retained earnings
		December 31, 2021	Answer 58
		Net income	Answer 59
		Dividends and stock repurchases	Answer 60
		December 31, 2022
		Treasury stock
		December 31, 2021	Answer 61
		Stock (repurchases) re-issuances	Answer 62
		December 31, 2022
		AOCI (L)
		December 31, 2021	Answer 63
		Comprehensive income (loss)	Answer 64
		December 31, 2022
		Noncontrolling interest
		December 31, 2021	Answer 65
		Other changes in equity	Answer 66
		December 31, 2022

Question 5

Market Capitalization Determine the market capitalization for each firm for the FY2022 year-end. Determine the number of shares outstanding from the balance sheet. Recall that shares outstanding is total shares issued less any treasury shares. Obtain the year-end stock price (or closing price on the last trading day before year end) from an investment website such as Seeking Alpha or Yahoo Finance.HINT:Use Close not Adjusted Close when obtaining year-end stock prices.

Note:For Parker Hannifin, enter shares outstanding in thousands to three decimal places (do not round amount).

Parker Hannifin
June 30, 2022
	Shares outstanding at year end	Answer 1	thousand
	Market price per share at year end	Answer 2	price per share
	Market capitalization at year end		thousand

Note:For Illinois Tool Works, enter shares outstanding in millions to one decimal place, if applicable (do not round amount).

Illinois Tool Works
Dec. 31, 2022
	Shares outstanding at year end	Answer 3	million
	Market price per share at year end*	Answer 4	price per share
	Market capitalization at year end		million

Use these excel screenshots as References

Parker Hannifin

AutoSave MAP ? C ... PH Excel Statements_082924 (2) ~ Q Search (Cmd + Ctrl + U) Home Insert Draw Page Layout Formulas Data Review View Automate Developer Comments Share Calibri (Body) 11 AA ab v General Insert v Ex Delete Paste B A E ( V $ % 9 Conditional Format Cell Sort & Find & Sensitivity Add-ins Analyze Formatting as Table Styles Format v DV Filter Select Data Clipboard Font Alignment Number Styles Cells Editing Sensitivity Add-ins Assistance G27 XV fx A B C D E F G H J K M N O P Q R S PARKER-HANNIFIN CORPORATION Consolidated Statement of Income 12 Months Ended (in $ thousands) June 30, 2022 June 30, 2021 June 30, 2020 Net Sales $ 15,861,608 $14,347,640 $ 13,695,520 Cost of sales 11,387,267 10,449,680 10,292,291 Gross profit 4,474,341 ,897,960 ,403,229 0 Selling, general and administrative expenses 1,627,116 1,527,302 1,656,553 Gain on disposal of assets (7,121) (109,332) (1,227) Operating income 2,854,346 ,479,990 1,747,903 13 Interest expense 255,252 250,036 308 ,161 Loss on forward contracts 1,015,426 15 Other expense (income), net (30,558 (17,003) (67,112) Income before income taxes 1,614,226 ,246,95 1,506,854 17 Income taxe 298,04 500,096 304,522 18 Net Income 1,316,186 1,746,861 1,202,332 19 Less: Noncontrolling interest in subsidiaries' earnings 581 761 362 20 Net Income Attributable to Common Shareholders $ 1,315,60 $ 1,746,100 $ 1,201,970 23 Earnings per Share Attributable to Common Shareholders 24 Basic earnings per share (in $) $ 10.24 $ 13.54 $ 9.36 25 Diluted earnings per share (in $) $ 10.09 $ 13.35 $ 9.26 39 40 41 PH IS PH CI PH BS PH SCF PH EQ + Ready Accessibility: Good to go 100%AutoSave MAGIC ... PH Excel Statements_082924 (2) ~ Q Search (Cmd + Ctrl + U) Home Insert Draw Page Layout Formulas Data Review View Automate Developer Comments Share Calibri 11 AA ab v Custom Insert v Ex Delete Paste BI UV A ( V $ % 9 Conditional Format Cell Sort & Find & Sensitivity Add-ins Analyze Formatting as Table Styles Format v DV Filter Select Data Clipboard Font Alignment Number Styles Cells Editing Sensitivity Add-ins Assistance D16 XV fx =+D9+D15 A B C D E F G H K L M N O P Q R PARKER-HANNIFIN CORPORATION Consolidated Statement of Comprehensive Income 12 Months Ended 5 (in $ thousands) June 30, 2022 June 30, 2021 June 30, 2020 7 Net Income $ 1,316,186 $ 1,746,861 $ 1,202,332 Less: Noncontrolling interest in subsidiaries' earnings 581 761 362 9 Net Income Attributable to Common Shareholders 1,315,605 1,746,100 1,201,970 10 Other comprehensive income (loss), net of tax Foreign currency translation adjustment and other (net of tax of $(3,236), (284,732) 328,792 (182,957) 11 $(3,664) and $4,820 in 2022, 2021 and 2020) Retirement benefits plan activity (net of tax of $(95,574), $(205,845) and 306,735 664,076 (317,546) 12 $97,477 in 2022, 2021 and 2020) 13 Other comprehensive income (loss) 22,003 992,868 (500,503) 14 Less: Other comprehensive (loss) income for noncontrolling interests (1,526 720 (676) 15 Other comprehensive income (loss) attributable to common shareholders 23,529 992,148 (499,827) 16 Total Comprehensive Income Attributable to Common Shareholders $ 1,339,134 $ 2,738,248 $ 702,143 39 PH IS PH C PH BS PH SCF PH EQ + Ready Accessibility: Good to go 100%AutoSave MAP ? C ... PH Excel Statements_082924 (2) ~ Q Search (Cmd + Ctrl + U) Home Insert Draw Page Layout Formulas Data Review View Automate Developer Comments Share Calibri (Body) 11 AA ab v General Insert v Ex Delete Paste A E ( V v % 9 Conditional Format Cell Sort & BIUV Find & Sensitivity Add-ins Analyze Formatting as Table Styles Format v DV Filter Select Data Clipboard Font Alignment Number Styles Cells Editing Sensitivity Add-ins Assistance K21 XV fx A B D E F G H J K M N P Q R S PARKER-HANNIFIN CORPORATION Consolidated Balance Sheet usands June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 5 Assets 6 cash equivalents $ 535,799 $733,117 $ 685,514 $ 3,219,767 ple securities and other investments 27,862 39,116 70,805 150,931 8 counts receivable, net 2,341,504 2,183,594 1,854,398 ,131,054 9 e and notes receivable 543,757 326,315 244,870 310,708 10 ies 2,214,553 2,090,642 1,964,195 1,833,469 1 expenses and other 6,383,16 243,966 214,986 182,494 12 rent assets 12,046,644 5,616,750 5,034,768 ,828,423 13 , plant and equipment 5,897,955 40,220 5,810,681 5,186,730 4 umulated depreciation 3,775,197 3,773,744 3,517,946 3,418,443 15 , plant and equipment, net 2,122,758 2,266,476 2,292,735 ,768,287 income taxes 110,585 104,251 126,839 150,462 ants and other assets 788,057 774,239 764,563 747,773 18 3,135,81 3,519,79 3,798,913 1,783,277 19 7,740,082 8,059,687 7,869,935 5,453,805 20 ets $ 25,943,943 $ 20,341,2 $ 19,887,753 $ 17,732,027 21 22 Liabilities 23 yable and long-term debt payable within one year $ 1,724,310 $ 2,824 $ 809,529 $ 587,014 24 5 payable, trade 1,731,925 1,667,878 1,111,759 1,413,155 25 payrolls and other compensation 470,132 507,027 424,231 426,285 6 domestic and foreign taxes 250,292 236,384 195,314 167,312 27 operating lease liabilities 36,023 40,19: 43,327 8 crued liabilities 1,646,636 642,197 564,213 558,007 29 rent liabilities 5,859,318 3,096,503 3,148,373 3,151,773 30 9,755,825 6,582,053 7,652,256 6,520,831 and other postretirement benefits 639,939 1,055,638 1,887,414 1,304,379 32 income taxes 307,044 553,981 418,851 230,791 33 m operating lease liabilities 100,337 93,904 96,44 34 b 421,560 545,45: 442,643 438,489 35 17,084,023 11,927,530 13,645,983 11,646,263 ders' Equity 38 ferred stock, $.50 par value 39 i stock, $.50 par value 90,523 90,523 90,523 90,523 40 al capital 327,307 329,619 416,585 462,086 PH IS PH CI PH BS PH SCF PH EQ + Ready Accessibility: Good to go 100%AutoSave MAP ? C ... PH Excel Statements_082924 (2) ~ Q Search (Cmd + Ctrl + U) Home Insert Draw Page Layout Formulas Data Review View Automate Developer Comments Share Calibri (Body) 11 AA abo v General Insert v Ex Delete Paste B A ( V v % 9 Conditional Format Cell Sort & Find & Sensitivity Add-ins Analyze Formatting as Table Styles Format v DV Filter Select Data Clipboard Font Alignment Number Styles Cells Editing Sensitivity Add-ins Assistance K21 XV fx A B C D E F G H K L M N O P Q R 30 Long-term debt 9,755,825 6,582,053 7,652,256 6,520,831 Pensions and other postretirement benefits 639,939 1,055,638 ,887,414 1,304,379 32 Deferred income taxes 307,044 553,981 418,851 230,791 33 Long-term operating lease liabilities 100,337 93,904 96,446 34 Other liabilities 421,560 545,451 442,64 438,489 35 Total Liabilities 17,084,023 11,927,530 13,645,983 11,646,263 37 Shareholders' Equity 38 Serial preferred stock, $.50 par value 39 Common stock, $.50 par value 90,523 90,523 90,52 90,523 40 Additional capita 27,307 329,619 416,585 462,086 41 Retained earnings 15,661,808 14,915,497 13,643,907 12,895,150 42 Accumulated other comprehensive (loss) (1,543,198 (1,566,727) (2,558,875 (2,059,048) 43 Treasury stock (5,688,42 (5,370,605 (5,364,916) (5,309,130) 4 Total Shareholders' Equity 8,848,011 8,398,307 6,227,224 5,079,581 45 Noncontrolling interests 11,909 15,363 14,546 6,183 46 8,859,920 8,413,670 6,241,770 6,085,764 47 Total Liabilities and Equity $ 25,943,943 $ 20,341,200 19,887,753 $ 17,732,027 48 49 50 53 Consolidated Balance Sheet (Parenthetical Information) June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 54 55 Serial preferred stock, par value per share (in $) $ 0.50 $ 0.50 $ 0.50 $0.50 56 Serial preferred stock, authorized (in shares) 3,000,000 3,000,000 3,000,000 3,000,000 57 Serial preferred stock, issued (in shares) 58 Common stock, par value per share (in $) $0.50 $0.50 $ 0.50 $ 0.50 59 Common stock, authorized (in shares) 600,000,000 600,000,000 600,000,000 600,000,000 60 Common stock, issued (in shares 181,046,12 181,046,128 181,046,128 181,046,128 61 Treasury shares (in shares) 52,594,956 51,900,460 52,490,165 52,566,086 62 Dividends paid per share (in $) $ 4.42 $ 3.67 $ 3.52 $ 3.16 63 64 65 66 67 68 69 PH IS PH CI PH BS PH SCF PH EQ + Ready Accessibility: Good to go 100%AutoSave MAGIC ... PH Excel Statements_082924 (2) ~ Q Search (Cmd + Ctrl + U) Home Insert Draw Page Layout Formulas Data Review View Automate Developer Comments Share Calibri 11 AA ab v Custom Insert v Box Delete Paste BI Uv - v A ( V v % 9 Conditional Format Cell Sort & Find & Sensitivity Add-ins Analyze Formatting as Table Styles Format v DV Filter Select Data Clipboard Font Alignment Number Styles Cells Editing Sensitivity Add-ins Assistance B55 XV fx =+B53+B54 A B C D E F G H K L M N O P PARKER-HANNIFIN CORPORATION Consolidated Statement of Cash Flows 12 Months Ended (in $ thousands) June 30, 2022 June 30, 2021 June 30, 2020 Cash Flows From Operating Activities Net Income $ 1,316,186 $ 1,746,861 $ 1,202,332 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 257,314 269,943 252,899 10 Amortization 314,450 325,447 284,632 11 Stock incentive plan compensation 137,093 121,483 111,375 12 Deferred income taxes (351,201) 51,500) 12,290 13 Foreign currency transaction gain (39,987 (10,948) (10,018) 14 Gain on sale of property, plant and equipment (5,727 (109,332) (1,850) 15 Gain on sale of businesses (1,394) 16 Gain on investments 3,972 (12,616) (2,084) 17 Loss (gain) on marketable securities 5,131 11,570) (587 ) 18 Other 70,443 14,424 17,984 19 Changes in assets and liabilities, net of effects from acquisitions: Accounts receivable (179,126) (298,511) 578,853 21 Inventories (212,134) (85,597 206,937 Prepaid expenses and other 37,630 (25,508) (9,312) Other assets (11,167) (8,779) (23,547) 4 Accounts payable, trade 131,384 526,781 (370,765) Accrued payrolls and other compensation (15,524) 72,412 (62,715) 26 Accrued domestic and foreign taxes 32,514 36,552 30,918 27 Other accrued liabilities 999,831 11,397 (148,531) 28 Pensions and other postretirement benefits 1,822 17,875 55,522 29 Other liabilities (41,836 46,187 (53,384) 30 Net cash provided by operating activities 2,441,730 2,575,001 2,070,949 32 Cash Flows From Investing Activities Acquisitions (net of cash acquired of $82,192 in 2020) (5,076,064) 34 Capital expenditures (230,044) (209,957) (232,591) Proceeds from sale of property, plant and equipment 39,353 140,590 26,345 36 Proceeds from sale of businesses 3, 36 37 Purchase of marketable securities and other investments 27,895) (34,809) (194,742) 38 Maturities and sales of marketable securities and other investments 31,809 79,41 275,483 39 Other (235,426) 24,744 177,576 40 Net cash used in investing activities (418,837) (13) (5,023,993) PH IS PH CI PH BS PH SCF PH EQ + Ready iJ Accessibility: Good to go Average: $ 2,688,836 Count: 3 Numerical Count: 3 Sum: $ 8,066,507 100%AutoSave MAGIC ... PH Excel Statements_082924 (2) ~ Q Search (Cmd + Ctrl + U) Home Insert Draw Page Layout Formulas Data Review View Automate Developer Comments Share Calibri 11 AA ab v Custom Insert v Box Delete Paste BI Uv A % 9 Conditional Format Cell Sort & Find & Sensitivity Add-ins Analyze Formatting as Table Styles Format v Filter Select Data Clipboard Font Alignment Number Styles Cells Editing Sensitivity Add-ins Assistance B55 XV fx =+B53+B54 A B C D E F G H K L M N O P 29 Other liabilities (41,836) 46,187 (53,384) 30 Net cash provided by operating activities 2,441,730 2,575,001 2,070,949 31 32 Cash Flows From Investing Activities 33 Acquisitions (net of cash acquired of $82,192 in 2020) 5,076,064) Capital expenditures (230,044) (209,957) (232,591) 35 Proceeds from sale of property, plant and equipment 39,35 140,590 26,345 36 Proceeds from sale of businesses 3 ,366 37 Purchase of marketable securities and other investments (27,895 34,809) (194,742) 38 Maturities and sales of marketable securities and other investments 31,809 79,419 275,483 39 Other (235,426) 24,744 177,576 40 Net cash used in investing activities (418,837) (13) (5,023,993) 41 42 Cash Flows From Financing Activities 43 Proceeds from exercise of stock options 2,831 4,684 2,623 44 Payments for common shares (460,056) (218,818) (216,049) 45 Acquisition of noncontrolling interests (1,200) 46 Proceeds from (payments of) notes payable, net 1,422,026 (723,496) 136,744 47 Proceeds from long-term borrowings 3,598,056 1,213 1,721,211 48 Payments for long-term borrowings 18,737 (1,211,748) (740,181) 49 Financing fees paid 58,629) 50 Dividends paid (569,855 (475,174) 453,838) 51 Net cash provided by (used in) financing activities 3,915,636 (2,623,339) 149,310 52 Effect of exchange rate changes on cash (23,770) 95,954 (30,519) 53 Net increase (decrease) in cash and cash equivalents and restricted cash ,914,759 47,603 (2,534,253) 54 Cash, cash equivalents and restricted cash at beginning of year 733,117 685,514 3,219,767 55 Cash, cash equivalents and restricted cash at end of year $ 6,647,876 $ 733,117 $ 685,514 56 57 58 Supplemental Information 59 Cash paid during the year for: 60 Interes $ 240,313 $ 236,979 $ 308,199 61 Income taxes $ 549,223 $ 485,885 $ 307,959 62 63 64 65 66 67 68 PH IS PH CI PH BS PH SCF PH EQ + Ready Accessibility: Good to go Average: $ 2,688,836 Count: 3 Numerical Count: 3 Sum: $ 8,066,507 100%AutoSave MAGIC ... PH Excel Statements_082924 (2) ~ Q Search (Cmd + Ctrl + U) Home Insert Draw Page Layout Formulas Data Review View Automate Developer Comments Share Calibri (Body) 11 AA ab v General Insert v x Delete Paste BI UV A