Below is the Income statement for Company X 1)Forecast the firm’s Earnings per s
ID: 2820432 • Letter: B
Question
Below is the Income statement for Company X
1)Forecast the firm’s Earnings per share and cash flow per share by filling in the box below.
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Start with the most recent income statement and common size it. For the forecast period, adjust the numbers for future growth and decline in sales. Other items in income statement should be based on adjustments to past ratios.
Income Statement
FY 2014
FY 2015
FY 2016
FY 2017
ASSUMPTIONS (% OF Revenue)
Assumed Growth Rate in %
Total Revenue
Cost of Revenue
Gross Profit
Total Operating Expense
Operating Income
Other Income, Net
EBIT
Interest Expense
Net Income From Continuing Ops
Non-Recurring Events
Discontinued Op
Income from non-controlling int.
Net Income
EPS
DPS
Shares Outstanding 5 1.18BExplanation / Answer
Common-size statement:
Past-ratios for other items calculated as below, to forecast for FY18, FY19, FY20 in the last column (taken average for the last 3 years, to be used as % forecast for next 3 years)
Below items are forecasted at these average rates for next 3 years
Forecast for FY18, FY19, FY20 as below:
Common size All numbers in thousands Revenue 12/31/2017 12/31/2016 12/31/2015 12/31/2014 Total Revenue 100.00% 100.00% 100.00% 100.00% Cost of Revenue 54.05% 52.58% 48.97% 47.44% Gross Profit 45.95% 47.42% 51.03% 52.56% Operating Expenses Research Development 7.28% 7.69% 8.56% 9.31% Selling General and Administrative 17.44% 18.42% 19.57% 21.02% Non Recurring - - - - Others 0.70% 0.85% 0.99% 1.15% Total Operating Expenses 85.38% 85.37% 83.68% 84.20% Operating Income or Loss 14.62% 14.63% 16.32% 15.80% Income from Continuing Operations Total Other Income/Expenses Net 2.18% 0.42% -0.23% -0.09% Earnings Before Interest and Taxes 14.62% 14.63% 16.32% 15.80% Interest Expense - - - - Income Before Tax 16.80% 15.04% 16.09% 15.71% Income Tax Expense 3.09% 2.12% 2.81% 10.49% Minority Interest - - - - Net Income From Continuing Ops 13.71% 12.92% 13.28% 5.22% Non-recurring Events Discontinued Operations - - - - Extraordinary Items - - - - Effect Of Accounting Changes - - - - Other Items - - - - Net Income Net Income 13.71% 12.92% 13.28% 5.22% Preferred Stock And Other Adjustments - - - - Net Income Applicable To Common Shares 13.71% 12.92% 13.28% 5.22%Related Questions
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