I woud like to know what is the formula for accumulated deficit and cash and cash equivalents (the plug).
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Module 11 Assignment
BusinessCourse
A Return to course
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Forecast Seagate Technology's 2020 balance sheet using the following forecast assumptions, which are expressed as a percentage of revenue unless otherwise indicated.
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Accounts receivable, net
9.5%
Inventories
9.3%
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Other current assets
1.8%
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Deferred income taxes
10.7%
Other assets, net
1.8%
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Accounts payable
13.7%
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Accrued employee compensation 1.6%
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Accrued warranty
0.9%
Accrued expenses
5.3%
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Long-term accrued warranty
1.0%
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Other noncurrent liabilities
1.3%
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• Forecast no change in the following balance sheet accounts: Goodwill, Long-term accrued income taxes, Long-term debt, less current portion, Ordinary shares, and Accumulated other comprehensive loss.
• Assume that in 2020, CAPEX will be 5.8% of revenue, and depreciation expense will be 5.4% of Property, equipment and leasehold improvements, gross at the start of the year, which was $9,835 million.
• Assume that in 2020, the company awards $99 million of stock-based compensation which increases Additional paid-in capital by the same amount. Assume that the company routinely includes this form of compensation in operating expenses each year.
• The company has a dividend payout ratio of 35.4% of net income.
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• Round all answers to the nearest whole number.
• Use a negative sign for your Accumulated other comprehensive loss and Accumulated deficit answers.
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SEAGATE TECHNOLOGY PLC
Forecasted Balance Sheet
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($ millions)
June 2020
Current assets
mbe My Subscriptions | my...
Cash and cash equivalents
$
2,935 v
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Accounts receivable, net
1,036 v
Inventories
1,015 v
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Other current assets
196 v
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Total current assets
5,182 v
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Property, equipment and leasehold improvements, net
1,971 v
Goodwill
1,237 v
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Other intangible assets, net
88 v
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Deferred income taxes
1,167 v
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Other assets, net
196
Total assets
$4
9,841 v
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Current liabilities
9 AT&T Account Management -.
Accounts payable
24
1,495 v
Accrued employee compensation
175 v
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Accrued warranty
98 v
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Accrued expenses
578 v
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Total current liabilities
2,346 v
Long-term accrued warranty
109 v
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Long-term accrued income taxes
4 v
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Other noncurrent liabilities
142 v
Long-term debt, less current portion
4,253 v
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Total liabilities
6.854 v
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Shareholders' equity
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Ordinary shares- par value $0.0001, 2.6 billion shares authorized, 1,340,697,595 and
1,354,218,154 shares issued and outstanding, respectively
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Additional paid-in capital
6,644 v
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Accumulated other comprehensive loss
(34) v
Accumulated deficit
(3,623) v
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Total shareholders' equity
2,987
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Total liabilities and shareholders' equity
9,841
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b. What does the forecasted adjustment to balance the accounting equation from part a reveal to us about the forecasted cash balance and related financing needs of the company? Explain.
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CSeagate will generate sufficient cash for the coming year. The cash balance decreases slightly, but not enough to require an adjustment.
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CSeagate will generate sufficient cash for the coming year. The cash balance increases fairly significantly, we could adjust marketable securities, leaving total assets unchanged.
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CSeagate will not generate sufficient cash for the coming year. The cash balance decreases fairly significantly, we could adjust marketable securities, leaving total assets unchanged.
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OSeagate will generate sufficient cash for the coming year. The cash balance increases slightly, but not enough to require an adjustment.
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Total current assets
5,182 v
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Property, equipment and leasehold improvements, net
1,971 v