Forecasting with the Parsimonious Method and Estimating
Share Value Using the DCF Model
Following are the income statement and balance sheet for Cisco
Sytems for the year ended July 30, 2016.
Cisco Sytems Consolidated Statements of Income |
|||
---|---|---|---|
Years Ended December ($ millions) | July 30, 2016 |
July 25, 2015 |
|
Revenue | |||
Product | $37,254 | $37,750 | |
Service | 11,993 | 11,411 | |
Total revenue | 49,247 | 49,161 | |
Cost of sales | |||
Product | 14,161 | 15,377 | |
Service | 4,126 | 4,103 | |
Total cost of sales | 18,287 | 19,480 | |
Gross margin | 30,960 | 29,681 | |
Operating expenses | |||
Research and development | 6,296 | 6,207 | |
Sales and marketing | 9,619 | 9,821 | |
General and administrative | 1,814 | 2,040 | |
Amortization of purchased intangible assets | 303 | 359 | |
Restructuring and other charges | 268 | 484 | |
Total operating expenses | 18,300 | 18,911 | |
Operating income | 12,660 | 10,770 | |
Interest income | 1,005 | 769 | |
Interest expense | (676) | (566) | |
Other income (loss), net | (69) | 228 | |
Interest and other income (loss), net | 260 | 431 | |
Income before provision for income taxes | 12,920 | 11,201 | |
Provision for income taxes | 2,181 | 2,220 | |
Net income | $10,739 | $8,981 |
Cisco Sytems Inc. Consolidated Balance Sheets |
||
---|---|---|
In millions, except par value | July 30, 2016 | July 25, 2015 |
Assets | ||
Current assets | ||
Cash and cash equivalents | $7,631 | $6,877 |
Investments | 58,125 | 53,539 |
Accounts receivable, net of allowance for doubtful accounts of $249 at July 30, 2016 and $302 at July 25, 2015 | 5,847 | 5,344 |
Inventories | 1,217 | 1,627 |
Financing receivables, net | 4,272 | 4,491 |
Other current assets | 1,627 | 1,490 |
Total current assets | 78,719 | 73,368 |
Property and equipment, net | 3,506 | 3,332 |
Financing receivables, net | 4,158 | 3,858 |
Goodwill | 26,625 | 24,469 |
Purchased intangible assets, net | 2,501 | 2,376 |
Deferred tax assets | 4,299 | 4,454 |
Other assets | 1,844 | 1,516 |
Total assets | $121,652 | $113,373 |
Liabilities | ||
Current liabilities | ||
Short-term debt | $4,160 | $3,897 |
Accounts payable | 1,056 | 1,104 |
Income taxes payable | 517 | 62 |
Accrued compensation | 2,951 | 3,049 |
Deferred revenue | 10,155 | 9,824 |
Other current liabilities | 6,072 | 5,476 |
Total current liabilities | 24,911 | 23,412 |
Long-term debt | 24,483 | 21,457 |
Income taxes payable | 925 | 1,876 |
Deferred revenue | 6,317 | 5,359 |
Other long-term liabilities | 1,431 | 1,562 |
Total liabilities | 58,067 | 53,666 |
Cisco shareholders' equity Preferred stock, no par value: 5 shaes authorized; none issued and outstanding |
-- | -- |
Common stock and additional paid-in capital, $0.001 par value: 20,000 shares authorized; 5,029 and 5,085 shares issued and outstanding at July 30, 2016 and July 25, 2015, respectively | 44,516 | 43,592 |
Retained earnings | 19,396 | 16,045 |
Accumulated other comprehensive income (loss) | (326) | 61 |
Total Cisco shareholders' equity | 63,586 | 59,698 |
Noncontrolling interests | (1) | 9 |
Total equity | 63,585 | 59,707 |
Total liabilities and equity | $121,652 | $113,373 |
(a) Compute net operating assets (NOA) for 2016.
NOA = $Answer ***Note: Not 63,585, 19,096, 0r
22,200***
Ans. Net operating assets (NOA) = 84,597 $
---------------------------------------------------------------
Calcuation :
Formula of Net operating assets (NOA)
=operating assests ― operating liabilities
=114021 – 29424
=84597 $
Here,
operting assets
= total assets – cash
=121652 – 7631
=114021 $
operating liability
=total liabilities – short term debt – long term debt
=58067 – 4160 – 24483
= 29424 $
Forecasting with the Parsimonious Method and Estimating Share Value Using the DCF Model Following are the...
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The following financial statement information is available for
Cisco Systems, Inc
The total amount owed to Cisco systems by
customers (ignore ‘financing receivables’) at July 30, 2016 is:
a. $6,096
b. $5,847
c. $5,598
d. $49,998
e. None of the above.
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I need help filling in these percentages.
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this is a clearer picture .. thanks
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