Refine Assumptions for PPE Forecast Provided below is FY2016 information for Med

Question

Refine Assumptions for PPE Forecast
Provided below is FY2016 information for Medtronic PLC.

a. Use the financial statements along with the additional information below to forecast property, plant and equipment, net for FY2017.

Round to the nearest million.

Forecasted PPE, net for FY2017 $Answer million

b. Suppose the company discloses in a press release that accompanies its year-end SEC filing that anticipated CAPEX for FY2017 is $1.5 billion. Use the guidance to refine your forecast of property, plant and equipment, net for FY2017.

$Answer million

Medtronic plc Consolidated Statement of Income ($ millions) Apr. 29, 2016 Net sales $29,499 Costs and expenses Cost of products sold 9,142 Research and development expenses 2,224 Selling, general, and administrative expense 9,469 Special charges (gains), net 70 Restructuring charge, net 290 Certain litigation charges, net 26 Acquisition-related items 283 Amortization of intangiable assets 1,931 Other expense, net 107 Operating profit 5,957 Interest expense, net 955 Income from operations before income taxes 5,002 Provision for income taxes 950 Net income $4,052

Explanation / Answer

Increase in sales 29499 Increase in PP&E(5007-4865) 142 So, increase in sale of 35842 requires Increase in PP&E of 142/29499*35842= 173 Million So, forecasted PP&E for 2017 will be(5007+173) 5180 Million b.Assuming same depreciation amount, 5007+1500-945 5562 Miilions

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