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Instructions:: Illinois Tool Works Inc. ITW $ 117.46 2015-12-31 0.30% 30.0% 4.0% 0.5%
Instructions:: Illinois Tool Works Inc. ITW $ 117.46 2015-12-31 0.30% 30.0% 4.0% 0.5%
- Operating Model
($ in Millions Except Per Share and Per Unit Data)
INSTRUCTIONS:
Use the following template and assumptions to build a 3-statement projection model over 5 years for Illinois Tool Works (ITW), a global manufacturing company.
Please clearly note any additional assumptions or modifications you make. Assume that the company's performance will be similar to its performance over
the past 3 years, except where otherwise noted in the assumptions.
If you have additional time remaining at the end, please write 1-2 sentence answers for the following case study questions:
1) What is the MAIN reason why the company's Cash balance changes the way it does over these 5 years?
2) What would you recommend to company management as the best financing decision over the next several years?
3) Would it benefit this company more to focus on sales growth or margin improvement? What would you recommend to management?
General Assumptions:
Interest Expense: $M
Interest Income: $M
Stock Repurchases: $M 1,900.0 4,198.0 1,943.0 1,000.0 1,000.0 1,000.0 1,000.0 1,000.0
Operating Expenses:
(+) Selling, General & Administrative: $M 2,815.0 2,678.0 2,417.0
(+) Amortization of Intangible Assets: $M 250.0 242.0 231.0
(+) Impairment of Goodwill: $M 2.0 3.0 2.0
Total Operating Expenses: $M 3,067.0 2,923.0 2,650.0
Non-Current Assets:
Net PP&E: $M 1,709.0 1,686.0 1,577.0
Goodwill: $M 4,886.0 4,667.0 4,439.0
Other Intangible Assets: $M 1,999.0 1,799.0 1,560.0
Other Long-Term Assets: $M 1,556.0 1,449.0 1,433.0
Total Non-Current Assets: $M 10,150.0 9,601.0 9,009.0
Non-Current Liabilities:
Long-Term Debt: $M 6,344.0 7,419.0 7,422.0
Deferred Tax Liability: $M 507.0 171.0 256.0
Other Long-Term Liabilities: $M 923.0 1,002.0 981.0
Total Non-Current Liabilities: $M 7,774.0 8,592.0 8,659.0