Question

Develop a consolidated financial projection of revenue, pretax income, and cash flow for the overall business, over that same number of years, both with and without the proposed investment. Use a spreadsheet or other relevant presentation vehicle to support your narrative, being sure to describe any relevant assumptions.

The company is Nordstrom. The investment is predicted to increase profits by 9%. The investment is predicted to increase expenses by 5%. The years needed are 2018-2025.

Answer 1

Answer

1 2021 2022 2023 2024 2025 730 796 868 946 1031 774 813 854 897 941 -87 -96 -91 -41 -43 -101 -46 121 -106 -48 127 115 Financial Projection of Cash Flow Statement of Nordstrom Fiscal year 2018 2019 2020 Operating Activities Net earnings 564 615 1670 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization expenses 669 702 738 Goodwill impairment - Amortization of deferred property incentives and other, net -75 -79 -83 Deferred income taxes, net Stock-based compensation expense Change in operating assets and liabilities: Accounts receivable Proceeds from sale of credit card receivables originated at Nordstrom Merchandise inventories Prepaid expenses and other assets Accounts payable Accrued salaries, wages and related benefits Other current liabilities Deferred property incentives 56 58 Other liabilities -2 -2 -2 Net cash provided by operating activities 1383 1477 -6 O -10 -11 15 TO 17 19 21 61 -2 1578 75 20 71 -3 1927 68 -3 1802 -2 1686 -3 2061 1296 -654 -920 Investing Activities Capital expenditures (654) (731) (846) Proceeds from sale of credit card receivables originated at third parties Other, net Net cash used in investing activities L -721 - 1 -720 L -757 - 1 -756 L |-687 L - 1 -686 -795 - 1 -794 L -835 - 2 -833 L -876 - 2 -875 2 -918 -653 111 1 -59 -62 -65 -68 -71 -250 Financing Activities Proceeds from long-term borrowings, net of discounts Principal payments on long-term borrowings (Decrease) increase in cash book overdrafts Cash dividends paid Payments for repurchase of common stock Proceeds from issuances under stock compensation plans Tax withholding on share-based awards Other, net Net cash used in financing activities -263 289 -335 -678 -712 -289 -785 189 -304 -824 198 -276 -747 180 -22 -29 -956 -319 -865 208 -909 163 171 218 -352 -954 229 -28 -37 -1220 -20 -21 -23 -24 -26 -26 -867 27 -33 -30 -1004 -32 -1054 -27 -35 -1162 -910 -1107 -224 - 213 -161 -110 Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 1181 -199 744 546 957 744 | -182 546 364 364 203 -138 203 65 65 -45 -77 -45 -122 957

Interpretation

By using the spreadsheet and following information the cash flow statement along with the overall financial projection of Nordstrom is projected upto the year 2025 starting from the year 2018. The assumption which is taken in this case is profits are increased by 9% and expenses are increased by 5% accordingly.