Question

Project the Cash Flows for Wal Mart for the next 5 years with explanations for your forecasts: Growth rate for 2018 is 10%, 2019 is 11%, 2020 is 5.5%, 2021 is 5% and 2022 is 4%.

	Actuals				Forecasts
Year	2015	2016	2017		2018	2019	2020	2021	2022
Cash Flows
Operating:
Income from continuing operations	16,814	15,080	14,293
- common size	58.9%	55.1%	45.3%
- rate of change		-10.3%	-5.2%
Depreciation and amortization	9,173	9,454	10,080
- common size	32.1%	34.5%	32.0%
- rate of change		3.1%
Deferred Income Taxes	-503	-672	761
- common size	-1.8%	-2.5%	2.4%
- rate of change		33.6%	-213.2%
Other operating activites	785	1,410	206
- common size	2.7%	5.1%	0.7%
- rate of change		79.6%	-85.4%
Recievables, net	-569	-19	-402
- common size	-2.0%	-0.1%	-1.3%
- rate of change		-96.7%	2015.8%
Inventories	-1,229	-703	1,021
- common size	-4.3%	-2.6%	3.2%
- rate of change		-42.8%	-245.2%
Accounts Payable	2,678	2,008	3,942
- common size	9.4%	7.3%	12.5%
- rate of change		-25.0%	96.3%
Accrued liabilities	1,249	1,303	1,137
- common size	4.4%	4.8%	3.6%
- rate of change		4.3%	-12.7%
Accrued Income Taxes	166	-472	492
- common size	0.6%	-1.7%	1.6%
- rate of change		-384.3%	-204.2%
Net Cash Provided by operating act.	28,564	27,389	31,530
- common size	100.0%	100.0%	100.0%
- rate of change		-4.1%	15.1%
Investing:
Payments for Property and Equipment	-12,174	-11,477	-10,619
- common size	109.4%	107.5%	75.9%
- rate of change		-5.7%	-7.5%
Proceeds from disposal of property and equipment	570	635	456
- common size	-5.1%	-5.9%	-3.3%
- rate of change		11.4%	-28.2%
Proceeds from disposal of certain operations	671	246	662
- common size	-6.0%	-2.3%	-4.7%
- rate of change		-63.3%	169.1%
Purchase of available for sale securities	0	0	-1,901
- common size	0.0%	0.0%	13.6%
- rate of change
Investment and business acquisitions, net	0	0	-2,463
- common size	0.0%	0.0%	17.6%
- rate of change
Other investing activities	-192	-79	-122
- common size	1.7%	0.7%	0.9%
- rate of change		-58.9%	54.4%
Net Cash used in investing	-11,125.00	-10,675.00	-13,987.00
- common size	100%	100%	100%
- rate of change		-4.0%	31.0%
Financing:
Net Change in short-term borrowing	-6,288	1,235	-1,673
- common size	41.7%	-7.7%	8.8%
- rate of change		-119.6%	-235.5%
Proceeds from issuance of long-term debt	5,174	39	137
- common size	-34.3%	-0.2%	-0.7%
- rate of change		-99.2%	251.3%
Payments of long-term debt	-3,904	-4,432	-2,055
- common size	25.9%	27.5%	10.9%
- rate of change		13.5%	-53.6%
Dividends paid	-6185	-6294	-6216
- common size	41.0%	39.0%	32.8%
- rate of change		1.8%	-1.2%
Purchase of Company Stock	-1,015	-4,112	-8,298
- common size	6.7%	25.5%	43.8%
- rate of change		305.1%	101.8%
Dividends paid to noncontrolling interest	-600	-719	-479
- common size	4.0%	4.5%	2.5%
- rate of change		19.8%	-33.4%
Purchase of noncontrolling interest	-1,844	-1,326	-90
- common size	12.2%	8.2%	0.5%
- rate of change		-28.1%	-93.2%
Other financing activities	-409	-513	-255
- common size	2.7%	3.2%	1.3%
- rate of change		25.4%	-50.3%
Net cash used in financing	-15,071	-16,122	-18,929
- common size	100.0%	100.0%	100.0%
- rate of change		7.0%	17.4%

Answer 1

Please find the below table along with the description in remarks column.

	Actuals			Forecasts
Year	2015	2016	2017		2018	2019	2020	2021	2022	Remark
Cash Flows
Operating:
Income from continuing operations	16,814	15,080	14,293		15722.3	17451.753	18411.59942	19332.17939	20105.46656
Depreciation and amortization	9,173	9,454	10,080		10390.6322	10710.8371	11040.90968	11381.15398	11731.88348	Average has been taken for the depriciation, as it will not change much
Deferred Income Taxes	-503	-672	761		761	761	761	761	761	Keep it constant
Other operating activites	785	1,410	206	0.051533753	810.229131	899.354336	948.818824	996.2597652	1036.110156	Avrerage of previous operating activities
Recievables, net	-569	-19	-402	-0.02107548	-330.1683	-366.486813	-386.643588	-405.975767	-422.214798	It is an average of previous 3 years (2.1%)
Inventories	-1,229	-703	1,021	-0.01931439	1,021	1,021	1,021	1,021	1,021
Accounts Payable	2,678	2,008	3,942		3144.46	3490.3506	3682.319883	3866.435877	4021.093312	20% average
Accrued liabilities	1,249	1,303	1,137		1572.23	1745.1753	1841.159942	1933.217939	2010.546656	10% average
Accrued Income Taxes	166	-472	492		492	492	492	492	492	Keep it constant
Net Cash Provided by operating act.	28,564	27,389	31,530		33583.6831	36204.9836	37812.16416	39377.27118	40756.88536
Investing:
Payments for Property and Equipment	-12,174	-11,477	-10,619		-10,619	-10,619	-10,619	-10,619	-10,619	Constant payment for PP&E
Proceeds from disposal of property and equipment	570	635	456		0	0	0	0	0	We believe disposal will not happen generally
Proceeds from disposal of certain operations	671	246	662		0	0	0	0	0	This is not repetative
Purchase of available for sale securities	0	0	-1,901		-2091.1	-2321.121	-2448.78266	-2571.22179	-2674.07066	As the sale increased company will buy more securities so we will take it equivalent to growth rate
Investment and business acquisitions, net	0	0	-2,463		-2709.3	-3007.323	-3172.72577	-3331.36205	-3464.61654	As the sale increased company will do more investment so we will take it equivalent to growth rate
Other investing activities	-192	-79	-122		-122	-122	-122	-122	-122	Kept constant
Net Cash used in investing	-11,125.00	-10,675.00	-13,987.00		-15541.4	-16069.444	-16362.5084	-16643.5838	-16879.6872
- common size	100%	100%	100%
- rate of change		-4.00%	31.00%		11.11%	3.40%	1.82%	1.72%	1.42%
Financing:
Net Change in short-term borrowing	-6,288	1,235	-1,673		-1840.3	-2042.733	-2155.08332	-2262.83748	-2353.35098	As the sale increased company will take more short term borrowing so we will take it equivalent to growth rate
Proceeds from issuance of long-term debt	5,174	39	137		6288.92	62.8892	62.8892	62.8892	62.8892	As the sale increased company will take debt (40%) initially and after that 10%
Payments of long-term debt	-3,904	-4,432	-2,055		-3773.352	-3018.6816	-1509.3408	-754.6704	-377.3352	First 60%, and after that 80 then 50%.
Dividends paid	-6185	-6294	-6216	0.4	-6288.92	-6980.7012	-7364.63977	-7732.87175	-8042.18662	It is 40% of income
Purchase of Company Stock	-1,015	-4,112	-8,298		0	0	0	0	0	It will be taken as 0.
Dividends paid to noncontrolling interest	-600	-719	-479		-628.892	-698.07012	-736.463977	-773.287175	-804.218662	It is 4% of Income
Purchase of noncontrolling interest	-1,844	-1,326	-90		0	0	0	0	0
Other financing activities	-409	-513	-255		-280.5	-311.355	-328.479525	-344.903501	-358.699641	As the sale increased company will buy more securities & do financial activity so we will take it equivalent to growth rate
Net cash used in financing	-15,071	-16,122	-18,929		-6523.044	-12988.6517	-12031.1182	-11805.6811	-11872.9019

Thank You!!