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4. For fiscal 2020: Free Cash Flow to Equity

4. For fiscal 2020: Free Cash Flow to Equity

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
Section: Chapter Questions
Problem 9.2AP
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Compute the following: 

 

4. For fiscal 2020: Free Cash Flow to Equity

5. Market Capitalization, Market to Book Value and the Price-Earnings Ratio as of year-end 2020

Stock Prices in 2018 = $68.98

2019 = $84.15

2020 = $107.82

Abbott Laboratories and Subsidiaries Abbott Laboratories and Subsidiaries Abbott Laboratories and Subsidiaries Consolidated Statement of Cash Flows (in millions) Consolidated Statement of Earnings (in millions except per share data) Consolidat ed Balance Sheet (dellars in millions) Year Ended December 31 Deceraber 31 2120 2019 Year Ended December 31 2020 2018 30,578 12,706 2,178 2.300 9,744 2019 Cash Flow From (Used in) Operating Activities: Net earnings Ad ustments to reccncile eamings to net cash from operating activities - Depreciation Amortization of intangible assets Stare-based compensation Amortization of inventory step-up Assets Net Sales 34,608 31,904 $ 4495 $ 3,687 $ 2,368 Cost of products sold, excluding amortization of intangible assets Amortization of intangible assets Research and development Selling, general and administrative Total Operating Cost and Expenses Operating Earnings Interest expense 15,003 2,132 2,420 9,696 29,251 5,357 13,231 1,936 2,440 9,765 Current assets Cash and cash equivalents Investments, rimarily bark time deposits and US. treasury bills Trade receivables, less allowances of- 2020 $460; 2019: $364 Inventories: Finished products Werk in process Materials Total inventories 6,838 $ 3,860 1,195 2,132 1,078 1,100 310 280 1,936 2,178 6,414 5,425 546 519 477 27,372 4,532 26,928 3,650 32 3,050 2,784 Investing ard financing loses, net Loss on extinguishrment of debt Trade receivables Invemtories Prepaid ex penses and other assets Trade accounts payable and other liablities 425 184 126 712 560 546 670 826 53 167 1,270 972 Interest income Net foreign exchange (gain) loss Debt extinguishment costs Other (income) expense, net Earnings from Continuing Operations Before Taxes Taxes on Earnings from Continuing Operations (46) (8) (94) (105) 28 5,012 4316 (924) (275) (190) 7 (493) (627 1,766 (593) (138) 20 Ocher prapaid experses and reczivabies ,867 (514) 167 1,786 15,667 63 23 (103) (139) 2,873 Total current assets 20,441 (191) 4,077 747 Investments 821 883 4,968 Income taxes (614) 7,901 (545) (214) Property and equipment, at cast: 497 390 539 Lad 538 519 Net Cash From Operating Activities 6,136 6,300 Bui dings Equipment Construction ir progress 4,014 Earnings from Continuing Operations 2,334 3,702 11,468 1,110 4,471 3,687 Cash Flow From (Used in) Investing Activities: 12,884 Acquisitions of property and aquipment Acquisitions of businesses and technologies, net of cash acqui red Proceads from business dispasitions Purchases of investnment sacurities (2,177) (42) (1,638) (170) (1,394) Net Earnings from Discontinued Operations, net of taxes 24 34 1,357 18,793 9,764 (54) 15,799 8,761 58 48 48 Net Earnings %24 24 Less: accurulated depreciation and amortization Net property and ecuipmen: Intangible assets, Goodwill 4,495 3,687 2,368 9,029 (83) (103) (131) 8,038 17,025 23,195 3,079 $ 67,887 Proceads from salas of investment securities Other Net Cash From (Lsed in) Invasting Acivities of amortization 14.784 21 73 Basic Earnings Per Common Share - Continuing Operations Discontinued Operations Net Earnings 19 27 102 23,744 2$ 2.51 $ 2.07 $ 1.32 Deferred income taxes and ocher assets (2215) (1,815 (1,356) 3,729 72,548 0.01 0.02 2.52 $ 2.07 $ 1.34 Cash Flow From (Used in) Financing Activities: Proceads fiom issuance of (repayments of) short-tern debt, ret and other Proceads from issuance of leng-term dest and debt with meturities over 3 months Repayments of kng-term debt and debt with maturities over 3 m:Ornths Purchases of common shares Proceads from stock ontions exercised Diluted Earnings Per Common Share -- Continuing Operations Discontinued Operations Net Earnings (26) 4,009 1281 1,842 2$ 2.49 %24 2.06 2$ 1.31 (1,333) (403) (3,441) (718 298 (12,433) 0.01 0.02 46 (238) 2$ 2.50 $ 2.06 1.33 245 271 Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share (2,560 Dividards paid Cther (2,270 (1,974) () 1,773 1,768 1,758 Dilutive Common Stock Options Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options Outstanding Common Stock Options Having No Dilutive Effect 13 13 12 Net Cash From (Used in) Financing Activities (2,775 (4,289 (10,391) Effect of exchange rate chɛnges or cash and cash equivalents 1,786 1,781 1,770 71 (16) (116) 2,978 16 61 Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginnirg of Year Cash and Cash Equivalents, End of Year (5,563) 3.860 9,407 3.850 $ 3,844 3,844 The accompanying notes to consolidated financial statements are an integral part of this statement. 6,838 Supplemental Cash Flow Information: Imcome tases paid 970 S 930 $ 740 43 In:erest paid 5459 677 845 The accompanying notes to cansalidated finarcial statements are an integral part of this statement.
Transcribed Image Text:Abbott Laboratories and Subsidiaries Abbott Laboratories and Subsidiaries Abbott Laboratories and Subsidiaries Consolidated Statement of Cash Flows (in millions) Consolidated Statement of Earnings (in millions except per share data) Consolidat ed Balance Sheet (dellars in millions) Year Ended December 31 Deceraber 31 2120 2019 Year Ended December 31 2020 2018 30,578 12,706 2,178 2.300 9,744 2019 Cash Flow From (Used in) Operating Activities: Net earnings Ad ustments to reccncile eamings to net cash from operating activities - Depreciation Amortization of intangible assets Stare-based compensation Amortization of inventory step-up Assets Net Sales 34,608 31,904 $ 4495 $ 3,687 $ 2,368 Cost of products sold, excluding amortization of intangible assets Amortization of intangible assets Research and development Selling, general and administrative Total Operating Cost and Expenses Operating Earnings Interest expense 15,003 2,132 2,420 9,696 29,251 5,357 13,231 1,936 2,440 9,765 Current assets Cash and cash equivalents Investments, rimarily bark time deposits and US. treasury bills Trade receivables, less allowances of- 2020 $460; 2019: $364 Inventories: Finished products Werk in process Materials Total inventories 6,838 $ 3,860 1,195 2,132 1,078 1,100 310 280 1,936 2,178 6,414 5,425 546 519 477 27,372 4,532 26,928 3,650 32 3,050 2,784 Investing ard financing loses, net Loss on extinguishrment of debt Trade receivables Invemtories Prepaid ex penses and other assets Trade accounts payable and other liablities 425 184 126 712 560 546 670 826 53 167 1,270 972 Interest income Net foreign exchange (gain) loss Debt extinguishment costs Other (income) expense, net Earnings from Continuing Operations Before Taxes Taxes on Earnings from Continuing Operations (46) (8) (94) (105) 28 5,012 4316 (924) (275) (190) 7 (493) (627 1,766 (593) (138) 20 Ocher prapaid experses and reczivabies ,867 (514) 167 1,786 15,667 63 23 (103) (139) 2,873 Total current assets 20,441 (191) 4,077 747 Investments 821 883 4,968 Income taxes (614) 7,901 (545) (214) Property and equipment, at cast: 497 390 539 Lad 538 519 Net Cash From Operating Activities 6,136 6,300 Bui dings Equipment Construction ir progress 4,014 Earnings from Continuing Operations 2,334 3,702 11,468 1,110 4,471 3,687 Cash Flow From (Used in) Investing Activities: 12,884 Acquisitions of property and aquipment Acquisitions of businesses and technologies, net of cash acqui red Proceads from business dispasitions Purchases of investnment sacurities (2,177) (42) (1,638) (170) (1,394) Net Earnings from Discontinued Operations, net of taxes 24 34 1,357 18,793 9,764 (54) 15,799 8,761 58 48 48 Net Earnings %24 24 Less: accurulated depreciation and amortization Net property and ecuipmen: Intangible assets, Goodwill 4,495 3,687 2,368 9,029 (83) (103) (131) 8,038 17,025 23,195 3,079 $ 67,887 Proceads from salas of investment securities Other Net Cash From (Lsed in) Invasting Acivities of amortization 14.784 21 73 Basic Earnings Per Common Share - Continuing Operations Discontinued Operations Net Earnings 19 27 102 23,744 2$ 2.51 $ 2.07 $ 1.32 Deferred income taxes and ocher assets (2215) (1,815 (1,356) 3,729 72,548 0.01 0.02 2.52 $ 2.07 $ 1.34 Cash Flow From (Used in) Financing Activities: Proceads fiom issuance of (repayments of) short-tern debt, ret and other Proceads from issuance of leng-term dest and debt with meturities over 3 months Repayments of kng-term debt and debt with maturities over 3 m:Ornths Purchases of common shares Proceads from stock ontions exercised Diluted Earnings Per Common Share -- Continuing Operations Discontinued Operations Net Earnings (26) 4,009 1281 1,842 2$ 2.49 %24 2.06 2$ 1.31 (1,333) (403) (3,441) (718 298 (12,433) 0.01 0.02 46 (238) 2$ 2.50 $ 2.06 1.33 245 271 Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share (2,560 Dividards paid Cther (2,270 (1,974) () 1,773 1,768 1,758 Dilutive Common Stock Options Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options Outstanding Common Stock Options Having No Dilutive Effect 13 13 12 Net Cash From (Used in) Financing Activities (2,775 (4,289 (10,391) Effect of exchange rate chɛnges or cash and cash equivalents 1,786 1,781 1,770 71 (16) (116) 2,978 16 61 Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginnirg of Year Cash and Cash Equivalents, End of Year (5,563) 3.860 9,407 3.850 $ 3,844 3,844 The accompanying notes to consolidated financial statements are an integral part of this statement. 6,838 Supplemental Cash Flow Information: Imcome tases paid 970 S 930 $ 740 43 In:erest paid 5459 677 845 The accompanying notes to cansalidated finarcial statements are an integral part of this statement.
Abbott Laboratories and Subsidiaries Consolidated Balance Sheet (dollars in millions) December 31 2020 2019 Liabilities and Shareholders' Investment Current liabilities: Short-term borrowings Trade accounts payable Salaries, 213 201 3.946 1,416 5,165 798 362 3,252 1,237 4,035 635 wages and commissions Other accrued liabilities Dividends payable Income taxes payable Current portion of long-term debt Total current liabilities 11,907 18,527 9,111 1,277 10,863 16,661 9,062 Long-term debt Post-employment obligations and other long-term liabilities Commitments and contingencies Shareholders' investment: Preferred shares, one dollar par value Authorized – 1,000,000 shares, none issued Common shares, without par value Authorized – 2,400,000,000 shares Issued Common shares held in treasury, at cost – Shares: 2020: 209,926,622; 2019: 214,351,838 Earnings employed in the business Accumulated other comprehensive income (loss) Total Abbott Shareholders' Investment stated capital amount– Shares: 2020: 1,981,156,896; 2019: 1,976,855,085 23,853 (10,147) 25,847 (8,465) 31,088 213 at 24,145 (10,042) 27,627 (8,946) 32.784 Noncontrolling interests in subsidiaries Total Shareholders' Investment 219 33.003 72,548 31,301 $ 67,887 The accompanying notes to consolidated financial statements are an integral part of this statement. 47
Transcribed Image Text:Abbott Laboratories and Subsidiaries Consolidated Balance Sheet (dollars in millions) December 31 2020 2019 Liabilities and Shareholders' Investment Current liabilities: Short-term borrowings Trade accounts payable Salaries, 213 201 3.946 1,416 5,165 798 362 3,252 1,237 4,035 635 wages and commissions Other accrued liabilities Dividends payable Income taxes payable Current portion of long-term debt Total current liabilities 11,907 18,527 9,111 1,277 10,863 16,661 9,062 Long-term debt Post-employment obligations and other long-term liabilities Commitments and contingencies Shareholders' investment: Preferred shares, one dollar par value Authorized – 1,000,000 shares, none issued Common shares, without par value Authorized – 2,400,000,000 shares Issued Common shares held in treasury, at cost – Shares: 2020: 209,926,622; 2019: 214,351,838 Earnings employed in the business Accumulated other comprehensive income (loss) Total Abbott Shareholders' Investment stated capital amount– Shares: 2020: 1,981,156,896; 2019: 1,976,855,085 23,853 (10,147) 25,847 (8,465) 31,088 213 at 24,145 (10,042) 27,627 (8,946) 32.784 Noncontrolling interests in subsidiaries Total Shareholders' Investment 219 33.003 72,548 31,301 $ 67,887 The accompanying notes to consolidated financial statements are an integral part of this statement. 47
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