Forecasting the Income Statement, Balance Sheet, and Statement of Cash Flows The
ID: 2797549 • Letter: F
Question
Forecasting the Income Statement, Balance Sheet, and Statement of Cash Flows
The following are the financial statements of Nike, Inc.
(in Millions)
In Millions
Instructions: Forecast Nike's fiscal year 2014 income statement.
Assume no change for other income and interest income.
Round forecasts to $ millions.
Do not use negative signs with your answers in the income statement.
Interest income, net
Instructions: Forecast Nike's fiscal year 2014 balance sheet.
Assume no change for: short-term investments, goodwill, notes payable, liabilities from discontinued operations, common stock, capital in excess of stated value and accumulated other comprehensive income.
Round forecasts to $ millions.
We forecast Nike's balance sheet using the following forecast assumptions:
Instructions: Forecast Nike's fiscal year 2014 stastement of cash flows.
Use negative signs with your answers below, when appropriate.
Consolidated Statements of Income Year ended May 31(in Millions)
2013 2012 2011 Income from continuing operations: Revenues $25,313 $23,331 $20,117 Cost of sales 14,279 13,183 10,915 Gross profit 11,034 10,148 9,202 Demand creation expense 2,745 2,607 2,344 Operating overhead expense 5,035 4,458 4,017 Total selling and administrative expense 7,780 7,065 6,361 Interest expense (income), net (3) 4 4 Other (income) (15) 54 (25) Income before income taxes 3,272 3,025 2,862 Income tax expense 808 756 690 Net income from continuing operations 2,464 2,269 2,172 Net income (loss) from discontinued operations 21 (46) (39) Net income $ 2,485 $ 2,223 $ 2,133Explanation / Answer
Forecasted Nike's fiscal year 2014 income statement ( $ Millions)
Income from continuing operations:
Year 2014
REMARKS
Revenues
27338
8% Increase over Year 2013
Cost of sales
15419
56.4% of revenues
Gross profit
11919
Revenues - Cost of Sales
Demand creation expense
2953
10.8% of Revenues
Operating overhead expense
5440
19.9% of Revenues
Total selling and administrative expense
8393
Gross Profit- Total Selling & Administrative Expenses
Interest expense (income), net
-3
Other (income)
-15
Income before income taxes
3545
Income tax expense
876
24.70%
Net income from continuing operations
2669
Net income (loss) from discontinued operations
Forecasted Nike's fiscal year 2014 income statement ( $ Millions)
Income from continuing operations:
Year 2014
REMARKS
Revenues
27338
8% Increase over Year 2013
Cost of sales
15419
56.4% of revenues
Gross profit
11919
Revenues - Cost of Sales
Demand creation expense
2953
10.8% of Revenues
Operating overhead expense
5440
19.9% of Revenues
Total selling and administrative expense
8393
Gross Profit- Total Selling & Administrative Expenses
Interest expense (income), net
-3
Other (income)
-15
Income before income taxes
3545
Income tax expense
876
24.70%
Net income from continuing operations
2669
Net income (loss) from discontinued operations
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