ShopNow!

Financial Statements Input Values

Income Statement Balance Sheet Cash Flow

Real Time Error Check

Historical Financials

2011 2012 2013

Balance Sheet Check OK OK OK
Cash Flow Check n/a OK OK
Net Income Check n/a OK OK

Input Fields for Income Statements

(in millions)
For the years ended December 31,
Year 2011 2012 2013
Revenue $33,669 $46,227 $56,206
Cost of Goods Sold $21,673 $32,647 $36,161
Gross Profit CALCULATED
SG&A $7,320 $9,847 $13,694
Depreciation & Amortization Exp. $870 $1,207 $1,510
EBIT CALCULATED
Interest Expense $525 $611 $684
Income Before Tax CALCULATED
Income Tax Expense $984 $575 $1,247
Net Income CALCULATED
Earnings Per Share CALCULATED
Shares Issued and Outstanding 1,000 CALCULATED

Input Fields for Balance Sheets

(in millions)
December 31,
2011 2012 2013
Assets
Cash $682 CALCULATED
Accounts Receivable $5,008 $5,083 $6,082
Inventory $4,284 $4,984 $6,460
Other Current Assets $766 $2,167 $1,468
Total Current Assets CALCULATED
PP&E $18,842 $21,868 $26,726
Accumulated Depreciation $5,066 CALCULATED
Net PP&E CALCULATED
Other Noncurrent Assets $1,224 $1,642 $1,813
Total Assets CALCULATED

Liabilities and Shareholders' Equity

Current Liabilities
Accounts Payable $4,215 $5,451 $6,934
 Current Portion of Long-Term Debt $879 $1,016 $606
Accrued Expenses $1,390 $1,416 $1,959
Income Taxes and Other $287 $1,327 $364
Total Current Liabilities CALCULATED
LT Liabilities
Deferred Income Taxes and Other $1,305 $1,996 $2,412
Long-Term Debt $9,167 $12,193 $17,051
Total Liabilities CALCULATED
Common Stock $68 CALCULATED
Additional Paid-In Capital $1,130 CALCULATED
Retained Earnings $7,299 CALCULATED

Cash Flow Additional Inputs

(in millions)
For the Year Ended December 31,
2012 2013
Financing Activities
Dividends Paid <– Enter as negative ($250) ($250)
Minimum Cash Balance $250 $250

Actual Rates
Tax Rate 30%
Projected Financials

2014
Balance Sheet Check OK
Cash Flow Check OK
Net Income Check OK

Notes:
Enter or change values in each of the Orange Input Fields, then
view the results on the respective statement tabs.

The Year fields will update the years throughout the different tabs.

Assumes no new shares issued

Assumed Constant
Assumed Constant

Added for historical ratio calculations

 Income Statement Notes:
ShopNow! Do not change any values on this pag
($millions) Com-Size: Common-Size Income Stat
For the years ended December 31,
2011 2012 2013 EBIT: Earnings Before Interest and Ta
Revenue $33,669 $46,227 $56,206 SG&A: Selling and General Administr
Cost of Goods Sold 21,673 32,647 36,161 CY: Current Year
PY: Prior Year
Gross Profit $11,996 $13,580 $20,045
PP&E: Property, Plant, & Equipment (
SG&A 7,320 9,847 13,694
LTD: Long-Term Debt (from Balance
EBITDA $4,676 $3,733 $6,351
Depreciation & Amortization 870 1,207 1,510 EBITDA Not official GAAP measure b
EBIT $3,806 $2,526 $4,841
Interest Expense 525 611 684
Income Before Tax $3,281 $1,915 $4,157
Income Tax Expense 984 575 1,247
Net Income $2,297 $1,340 $2,910

Shares Issued and Outstanding 1,000 1,000 1,000

Earnings Per Share $2.30 $1.34 $2.91

Income Statement
ShopNow!
(Common Size - % of Revenue)
2011 2012 2013
Revenue 100% 100% 100%
Cost of Goods Sold 64% 71% 64%
Gross Profit 36% 29% 36%
SG&A 22% 21% 24%
EBITDA 14% 8% 11%
Depreciation & Amortization 3% 3% 3%
EBIT 11% 5% 9%
Interest Expense 2% 1% 1%
Income Before Tax 10% 4% 7%
Income Tax Expense 3% 1% 2%
Net Income 7% 3% 5%

Income Statement
ShopNow!
(Y-o-Y Change)
2011-2012 2012-2013
Revenue 37.3% 21.6%
Cost of Goods Sold 50.6% 10.8%
Gross Profit 13.2% 47.6%
SG&A 34.5% 39.1%
EBITDA (20.2%) 70.1%
Depreciation & Amortization 38.7% 25.1%
EBIT (33.6%) 91.6%
Interest Expense 16.4% 11.9%
Income Before Tax (41.6%) 117.1%
Income Tax Expense (41.6%) 116.9%
Net Income (41.7%) 117.2%
Earnings Per Share (41.7%) 117.2%

Shares Issued and Outstanding 0.0% 0.0%

nge any values on this page. Use the IncomeInputs Tab to make changes.

Common-Size Income Statement

ngs Before Interest and Taxes

ing and General Administrative Expenses
Year
ar
erty, Plant, & Equipment (from Balance Sheets)
Term Debt (from Balance Sheets)

ot official GAAP measure but commonly used in practice as profitability metric.

 Balance Sheet
ShopNow!
($millions)
As of December 31, Change in Balance Sheet
2011 2012 2013 2011 to 2012 2012 to 2013
ASSETS
Cash & Cash Equivalents $682 $3,515 $6,807 $2,833 $3,292
Accounts Receivable 5,008 5,083 6,082 75 999
Inventory 4,284 4,984 6,460 700 1,476
Other Current Assets 766 2,167 1,468 1,401 (699)
Total Current Assets $10,740 $15,749 $20,817 $5,009 $5,068

Gross PP&E $18,842 $21,868 $26,726 $3,026 $4,858

Accumulated Depreciation 5,066 6,273 7,783 1,207 1,510
Net PP&E $13,776 $15,595 $18,943 $1,819 $3,348

Other Noncurrent Assets $1,224 $1,642 $1,813 $418 $171

TOTAL ASSETS $25,740 $32,986 $41,573 $7,246 $8,587
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $4,215 $5,451 $6,934 $1,236 $1,483
Current Portion of Long-Term Debt 879 1,016 606 137 (410)
Accrued Expenses 1,390 1,416 1,959 26 543
Income Taxes and Other 287 1,327 364 1,040 (963)
Total Current Liabilities $6,771 $9,210 $9,863 $2,439 $653
Long Term Liabilities
Deferred Income Taxes and Other $1,305 $1,996 $2,412 $691 $416
Long-Term Debt 9,167 12,193 17,051 3,026 4,858
Total Long Term Liabilities $10,472 $14,189 $19,463 $3,717 $5,274
Total Liabilities $17,243 $23,399 $29,326 $6,156 $5,927

Common Stock $68 $68 $68 $0 $0

Additional Paid-In Capital 1,130 1,130 1,130 0 0
Retained Earnings 7,299 8,389 11,049 1,090 2,660
Shareholders' Equity $8,497 $9,587 $12,247 $1,090 $2,660

TOTAL LIABILITIES AND

SHAREHOLDERS' EQUITY $25,740 $32,986 $41,573 $7,246 $8,587
Balance Check (OK or Error) OK OK OK
Notes:
Do not change any values on this tab. Use the BalanceInputs Tab to make
any changes.

Balance Check field verifies that the Total Assets is equal to the Total
Liabilities and Shareholders' Equity fields and it turns Red and says Error if it
doesn't balance.
 Statement of Cash Flows
ShopNow!
Indirect Method
($millions)
For the Years Ended December 31,
2012 2013
Cash flows from Operating Activities Source
Net Income $1,340 $2,910 Income Statement
Adjustments to Reconcile Net Income to Net Cash
Flow
Noncash Adjustments
+ Depreciation and Amortization $1,207 $1,510 Income Statement
Changes in Working Capital
Decrease (Increase) in A/R ($75) ($999) −Δ Balance Sheet
Decrease (Increase) in Inventory (700) (1,476) −Δ Balance Sheet
Decrease (Increase) in Other Current Assets (1,401) 699 −Δ Balance Sheet
Increase (Decrease) in A/P 1,236 1,483 Δ Balance Sheet
Increase (Decrease) in Accrued
26 543 Δ Balance Sheet
Expenses
Increase (Decrease) in Income
1,040 (963) Δ Balance Sheet
Taxes and Other
Net Cash Flow From Operating Activities $2,673 $3,707
Cash flows from Investing Activities
CapEx Spend ($3,026) ($4,858) −Δ Balance Sheet
Changes in LT Assets & Liabilities
Decrease (Increase) in Other Noncurrent Assets ($418) ($171) −Δ Balance Sheet
Increase (Decrease) in Deferred Income Taxes
691 416 Δ Balance Sheet
and Other
Net Cash Flow from Investing Activities ($2,753) ($4,613)
Cash flows from Financing Activities
Increase (Decrease) in Long-Term
$3,163 $4,448 Δ Balance Sheet
Debt [Source (Use) of Cash]
Less Dividends Paid (250) (250) Inputs
Net Cash Flow from Financing Activities $2,913 $4,198
Summary PY Balance
Beginning Cash $682 $3,515 Balance Sheet Cash
Ending Cash 3,515 6,807
Minimum Cash Balance 250 250 Inputs
Excesss (Required) Cash $3,265 $6,557
Ending Cash vs. Cash on Balance Sheet Check $3,515 $6,807
Check Sum OK OK
Notes:
Do not make any changes on this tab. Change either the CashFlowInputs Tab or the inputs tabs for the
IncomeInputs or BalanceInputs tabs to change this data.

The Check Sum Checks Ending Cash against Cash on the Balance Sheet for that Year and Should be OK and
not in Error. To get this to balance, change various CashFlowInputs values until it balances. Note that the
inputs on that page are a simplification of the real statements of cash flow, which have more
variables such as bad debt expense and so on, but these statements are simplified and omit many of
these considerations.The Check Sum Checks Ending Cash against Cash on the Balance Sheet for that Year
and Should be OK and not in Error. To get this to balance, change various values on the CashFlowInputs tab
until it balances.

CashFlowInputs refers to the the CashFlowInputs tab. This information would be available from supporting
schedules or the organization's other accounting information.

CapEx: Capital Expenditures

Increase (Decrease) in Long-Term Debt is the Current Portion of Long-Term Debt + Long-Term Debt.
 for the

e OK and
that the
ore
mit many of
that Year
nputs tab

upporting

bt.
 Financial Ratios 2011 2012 2013
Inputs for Financial Ratios and Calculations
Days 365
Weighted Average Cost of Capital (WACC) 10% 10% 10%
ShopNow! Current Stock Price per Share $50 $50 $50
Financial Ratios and Calculations For Part I, Domain B
Chapter 8, Topic 1: Liquidity Ratios
Current Ratio 1.59 1.71 2.11
Quick Ratio 0.84 0.93 1.31
Alternate Quick Ratio 0.84 0.93 1.31
Cash Ratio 0.10 0.38 0.69
Chapter 8, Topic 2: Leverage Ratios
Debt to Total Assets 39% 40% 42%
Total debt $10,046 $13,209 $17,657
Total Liabilities to Total Assets 67% 71% 71%
Debt to Equity 118% 138% 144%
Alternate Debt to Equity 118% 138% 144%
Long-Term Debt to Equity 108% 127% 139%
% Change in EBIT -34% 92%
% Change in Revenue 37% 22%
Degree of Operating Leverage (DOL) -0.90 4.25
% Change in EPS -42% 117%
Degree of Financial Leverage (DFL) 1.24 1.28
% Change in Net Income -42% 117%
Degree of Total Leverage -1.12 5.43
Interest Coverage 7.25 4.13 7.08
Cash Coverage 8.91 6.11 9.29
Chapter 8, Topic 3: Activity Ratios
Average A/R Turnover 9.2 10.1
Average A/R $5,046 $5,583
Days' Sales Outstanding 40 36
Average Inventory $4,634 $5,722
Average Inventory Turnover 7.0 6.3
Days' Inventory Outstanding 52 58
Average A/P $4,833 $6,193
Average A/P Turnover 6.8 5.8
Days' Payables Outstanding 54 63
Cash Conversion Cycle 38 32
Average Asset Turnover 1.57 1.51
Average Fixed Assets (Net PP&E) $14,686 $17,269
Average Fixed Asset Turnover 3.15 3.25
Average Current Assets $13,245 $18,283
Average Current Liabilties $7,043 $8,726
Average Working Capital Turnover 7.45 5.88
Chapter 8, Topic 4: Profitability Ratios
Gross Margin 35.6% 29.4% 35.7%
EBITDA Margin 13.9% 8.1% 11.3%
EBIT Margin 11.3% 5.5% 8.6%
Effective Tax Rate 30.0% 30.0% 30.0%
Pretax Profit Margin 9.7% 4.1% 7.4%
Profit Margin 6.8% 2.9% 5.2%
Return on Average Assets 4.6% 7.8%
Return on Average Equity 14.8% 26.7%
Average Total Asset Turnover 1.57 1.51
Average Equity Multiplier 3.25 3.41
Return on Average Equity (DuPont Equation) 15% 27%
Return on Capital Employed (ROCE) 11% 15%
Basic Earnings Per Share (EPS) $2.30 $1.34 $2.91
NOPAT $2,665 $1,768 $3,389
Capital Employed (Debt + Equity) $18,543 $22,796 $29,904
Average Capital Employed $20,670 $26,350
Economic Profit (Economic Value Added (EVA))
(Average Capital Employed) ($299) $754
Net Investment in Capital Employed $4,253 $7,108
Free Cash Flow (FCF) ($353) ($1,151)
Free Cash Flow to the Firm (FCFF) $75 ($672)
Free Cash Flow to Equity (FCFE) $2,810 $3,297
Chapter 8, Topic 5: Market Ratios
Dividend Yield 0.50% 0.50%
Earnings Yield 2.68% 5.82%
Price to Earnings 37 17
Price To Book 5.88 5.22 4.08
Alternate Price to Book 5.88 5.22 4.08
Price to Sales 1.49 1.08 0.89
Price to Cash Flow 18.71 13.49
Price to EBITDA 10.69 13.39 7.87
 Projected Financials
Financial Projection Input Assumptions Balance Sheet Check
($millions) Cash Flow Check
Net Income Check
Assumptions Actual Performance
Income Statement 2014 2011 2012 2013
Revenue Growth Rate 30.0% n/a 37.3% 21.6%
Gross Profit (% of Revenue) 35.7% 35.6% 29.4% 35.7%
SG&A (% of Revenue) 25.4% 21.7% 21.3% 24.4%
Depreciation Rate (% of Gross PPE) 6.9% 6.4% 6.9%
Long-Term Debt Interest Rate 5.2% 6.1% 5.2%
Tax Rate (% of Income Before Tax) 30% 30.0% 30.0% 30.0%
Balance Sheet 2014 2011 2012 2013
Average A/R Turnover Ratio 10.1 9.2 10.1
Average Inventory Turnover Ratio 6.3 7.0 6.3
Other Current Assets $1,468 $2,167 $1,468
Gross PP&E Growth Rate (% of Revenue) 8.6% 6.5% 8.6%
Other NonCurrent Assets $1,813 $1,642 $1,813
Avaerage A/P Turnover Ratio 5.8 6.8 5.8
Current Portion of Long-Term Debt $606 $1,016 $606
Average Accrued Expenses Turnover Ratio 29.5 30.3 29.5
Taxes Payable and Other/Tax Expense 29.19% 29.17% 230.78% 29.19%
Deferred Income Taxes and Other $2,412 $1,996 $2,412
Additional Paid-In Capital $1,130 $1,130 $1,130
Dividends/Share $0.25 $0.25 $0.25
Cash Flow Assumptions
Dividends Paid ($250) ($250)
Minimum Cash Balance $250 $250
2014
Notes:
OK Enter or change values in each of the Orange Input Fields, then view the results
OK on the ProjectedIncome, ProjectedBalanceSheet and ProjectedCashFlows tabs.
OK
Turnover rates are calculated using average rates: (CY+PY)/2 rather than using ending
values.
CY: Current Year
PY: Prior Year

Other Current Assets: Enter a value or assume no change from the prior year.

Other Noncurrent Assets: Enter a value or assume no change from the prior year.

Current Portion of Long-Term Debt is taken from the Footnotes for the most recent
Deleted year's
Accumulated
Actuals.depreciation
It is not directly related to long-term debt as some debt may be retired
and new debt may be added. As the footnotes do not exist for this example, enter a
value that is not wildly different from prior years.

Current Portion of Long-Term Debt: Enter a value or assume no change from the
prior year.

Common Stock: Model assumes no change from the prior year.

Additional Paid-In Capital: Enter a value or assume no change from the prior year.
hen view the results
edCashFlows tabs.

her than using ending

the prior year.

om the prior year.

s for the most recent

e debt may be retired
is example, enter a

no change from the

from the prior year.

Pro Forma Income Statement Notes:
Do not change any values on this tab.
ShopNow! Use the ProjectionInputs tab to make
changes.
($millions)
For the years ended December 31,
2013 2014
Revenue $56,206 $73,068
Cost of Goods Sold 36,161 47,009
Gross Profit $20,045 $26,059
SG&A 13,694 18,533
EBITDA $6,351 $7,526
Depreciation & Amortization 1,510 1,845
EBIT $4,841 $5,680
Interest Expense 684 883
Income Before Tax $4,157 $4,797
Income Tax Expense 1,247 1,439
Net Income $2,910 $3,358
Earnings Per Share $2.91 $3.36

Shares Issued and Outstanding 1,000 1,000

Pro Forma Income Statement

ShopNow!
(Y-o-Y Change)
2012-2013
Revenue 30.0%
Cost of Goods Sold 30.0%
Gross Profit 30.0%
SG&A 35.3%
EBITDA 18.5%
Depreciation & Amortization 22.2%
EBIT 17.3%
Interest Expense 29.1%
Income Before Tax 15.4%
Income Tax Expense 15.4%
Net Income 15.4%
Earnings Per Share 15.4%

Shares Issued and Outstanding 0.0%

his tab.
o make
 Pro Forma Balance Sheet Notes:
Do not change any valu
ShopNow! tab to make changes.
($millions)
Change The Balance Check field
ASSETS Liablities and Shareholde
As of December 31, 2013 to 2014
Otherwise "OK" appears.
2013 2014 $ %
ASSETS Shaded cells in the Chang
Cash & Cash Equivalents $6,807 $4,117 ($2,690) -40% used in the Pro Form Stat
Accounts Receivable 6,082 7,257 1,175 19%
Inventory 6,460 7,439 979 15%
Other Current Assets 1,468 1,468 0 0%
Total Current Assets $20,817 $20,281 ($536) -3%
PP&E $26,726 $33,041 $6,315 24%
Accumulated Depreciation 7,783 9,628 1,845 24%
Net PP&E $18,943 $23,413 $4,470 24%
Other Noncurrent Assets $1,813 $1,813 $0 0%
TOTAL ASSETS $41,573 $45,507 $3,934 9%
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $6,934 $8,050 $1,116 16%
Current Portion of Long-Term Debt 606 606 0 0%
Accrued Expenses 1,959 2,218 259 13%
Income Taxes and Other 364 420 56 15%
Total Current Liabilities $9,863 $11,295 $1,432 15%
Long Term Liabilities
Deferred Income Taxes and Other $2,412 $2,412 $0 0%
Long-Term Debt 17,051 16,445 (606) -4%
Total Long Term Liabilities $19,463 $18,857 ($606) -3%
Total Liabilities $29,326 $30,152 $826 3%
Common Stock $68 $68 $0 0%
Additional Paid-In Capital 1,130 1,130 0 0%
Retained Earnings 11,049 14,157 3,108 28%
Shareholders' Equity $12,247 $15,355 $3,108 25%
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $41,573 $45,507 $3,934 9%
Balance Check (OK or Error) OK OK OK
Notes:
Do not change any values on this tab. Use the ProjectionInputs
ab to make changes.

The Balance Check field checks that Total Assets and Total
Liablities and Shareholders' Equity are equal. If not "Error" appears.
Otherwise "OK" appears.

haded cells in the Change in Balance Sheet column are those cells
sed in the Pro Form Statement of Cash Flows.
Pro Forma Statement of Cash Flows Notes:
Do not make any changes o
ShopNow!
Indirect Method The Check Sum Checks Endin
be OK and not in Error. To ge
($millions) balances. Note that the inp
For the years ended December 31, cash flow, which have mor
2013 2014 Source statements are simplified
Cash flows from Operating Activities Ending Cash against Cash on
Net Income $2,910 $3,358 Income Statement To get this to balance, chang
Adjustments to Reconcile Net Income to Net
Cash Flow CapEx: Capital Expenditures
Noncash Adjustments Increase (Decrease) in Long-
+ Depreciation and Amortization $1,510 $1,845 Income Statement Debt.
Changes in Working Capital
Decrease (Increase) in A/R ($999) ($1,175) −Δ Balance Sheet
Decrease (Increase) in Inventory (1,476) (979) −Δ Balance Sheet
Decrease (Increase) in Other Current Assets 699 0 −Δ Balance Sheet
Increase (Decrease) in A/P 1,483 1,116 Δ Balance Sheet
Increase (Decrease) in Accrued Expenses 543 259 Δ Balance Sheet

Increase (Decrease) in Income Taxes and Other (963) 56 Δ Balance Sheet

Net Cash Flow From Operating Activities $3,707 $4,481

Cash flows from Investing Activities
CapEx Spend ($4,858) ($6,315) −Δ Balance Sheet
Changes in LT Assets & Liabilities
Decrease (Increase) in Other Noncurrent Assets ($171) $0 −Δ Balance Sheet
Increase (Decrease) in Deferred Income Taxes
416 0 Δ Balance Sheet
and Other
Net Cash Flow from Investing Activities ($4,613) ($6,315)
Cash flows from Financing Activities
Increase (Decrease) in Long-Term
$4,448 ($606) Δ Balance Sheet
Debt [Source (Use) of Cash]
Less Dividends Paid (250) (250) ProjectedInputs
Net Cash Flow from Financing Activities $4,198 ($856)
Summary PY Balance
Beginning Cash $3,515 $6,807 Sheet Cash
Ending Cash 6,807 4,117
Minimum Cash Balance 250 250 Inputs
Excesss (Required) Cash $6,557 $3,867
Ending Cash vs. Cash on Balance Sheet Check $6,807 $4,117
Check Sum OK OK
Notes:
Do not make any changes on this tab. Change on ProjectionInputs tab

The Check Sum Checks Ending Cash against Cash on the Balance Sheet for that Year and Should
be OK and not in Error. To get this to balance, change various CashFlowInputs values until it
balances. Note that the inputs on that page are a simplification of the real statements of
cash flow, which have more variables such as bad debt expense and so on, but these
statements are simplified and omit many of these considerations.The Check Sum Checks
Ending Cash against Cash on the Balance Sheet for that Year and Should be OK and not in Error.
To get this to balance, change various values on the CashFlowInputs tab until it balances.

CapEx: Capital Expenditures

Increase (Decrease) in Long-Term Debt is the Current Portion of Long-Term Debt + Long-Term
Debt.
 Pro Forma Income Statement
ShopNow!
($millions)
For the years ended December 31,
2013 2014 2014 2014
Actual -2%Forecast Forecast +2% Forecast
Revenue $56,206 $71,944 $73,068 $74,192
Cost of Goods Sold $36,161 $46,286 $47,009 $47,733
Gross Profit $20,045 $25,658 $26,059 $26,459
SG&A $13,694 $18,248 $18,533 $18,818
EBITDA $6,351 $7,410 $7,526 $7,641
Depreciation &
Amortization $1,510 $1,845 $1,845 $1,845
EBIT $4,841 $5,564 $5,680 $5,796
Interest Expense $684 $883 $883 $883
Income Before Tax $4,157 $4,681 $4,797 $4,913
Income Tax Expense $1,247 $1,404 $1,439 $1,474
Net Income $2,910 $3,277 $3,358 $3,439
Earnings Per Share $2.91 $3.28 $3.36 $3.44
Shares Issued and
Outstanding 1,000 1,000 1,000 1,000

% Change: 2013-2014
2013 2014 2014 2014
Actual -2%Forecast Forecast +2% Forecast
Revenue $56,206 28.0% 30.0% 32.0%
Cost of Goods Sold $36,161 28.0% 30.0% 32.0%
Gross Profit $20,045 28.0% 30.0% 32.0%
SG&A $13,694 33.3% 35.3% 37.4%
EBITDA $6,351 16.7% 18.5% 20.3%
Depreciation &
Amortization $1,510 22.2% 22.2% 22.2%
EBIT $4,841 14.9% 17.3% 19.7%
Interest Expense $684 29.1% 29.1% 29.1%
Income Before Tax $4,157 12.6% 15.4% 18.2%
Income Tax Expense $1,247 12.6% 15.4% 18.2%
Net Income $2,910 12.6% 15.4% 18.2%
Earnings Per Share $2.91 12.6% 15.4% 18.2%
Shares Issued and
Outstanding 1,000 0.0% 0.0% 0.0%
 Pro Forma Income Statement
ShopNow!
(all numbers in millions)
For the years ended December 31,
2013 2014 2014 2014
Actual Worst Case Base Case Best Case
Revenue $56,206 $50,585 $68,346 $73,068
Cost of Goods Sold $36,161 32,545 43,972 45,302
Gross Profit $20,045 $18,041 $24,375 $27,766
SG&A $13,694 12,325 16,677 17,802
EBITDA $6,351 $5,716 $7,698 $9,964
Depreciation &
Amortization $1,510 1,845 1,845 1,845
EBIT $4,841 $3,870 $5,853 $8,118
Interest Expense $684 597 883 1,074
Income Before Tax $4,157 $3,274 $4,970 $7,044

Income Tax Expense $1,247 982 1,491 2,254

Net Income $2,910 $2,292 $3,479 $4,790
Earnings Per Share $2.91 $2.29 $3.48 $4.79
Shares Issued and
Outstanding 1,000 1,000 1,000 1,000

% Change: 2013-2014
2013 2014 2014 2014
Actual Worst Case Base Case Best Case
Revenue $56,206 -10.0% 21.6% 30.0%
Cost of Goods Sold $36,161 -10.0% 21.6% 25.3%
Gross Profit $20,045 -10.0% 21.6% 38.5%
SG&A $13,694 -10.0% 21.8% 30.0%
EBITDA $6,351 -10.0% 21.2% 56.9%
Depreciation &
Amortization $1,510 22.2% 22.2% 22.2%
EBIT $4,841 -20.0% 20.9% 67.7%
Interest Expense $684 -12.8% 29.1% 57.0%
Income Before Tax $4,157 -21.2% 19.6% 69.4%

Income Tax Expense $1,247 -21.2% 19.6% 80.8%

Net Income $2,910 -21.3% 19.5% 64.6%
Earnings Per Share $2.91 -21.3% 19.5% 64.6%
Shares Issued and
Outstanding 1,000 0.0% 0.0% 0.0%
 Pro Forma Balance Sheet
ShopNow!
($millions)
December 31,
2013 2014 2014 2014
ASSETS Worst Base Best
Cash & Cash Equivalents $6,807 $3,547 $4,925 $7,978
Accounts Receivable 6,082 6,323 6,788 6,089
Inventory 6,460 6,509 6,958 6,040
Other Current Assets 1,468 1,468 1,468 1,468
Total Current Assets $20,817 $17,847 $20,139 $21,576
PP&E $26,726 $31,098 $32,633 $33,041
Accumulated Depreciation $7,783 $9,628 9,628 9,628
Net PP&E $18,943 $21,470 $23,005 $23,413
Other Noncurrent Assets $1,813 $1,813 $1,813 $1,813
TOTAL ASSETS $41,573 $41,130 $44,957 $46,802
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $6,934 $5,573 $7,530 $7,758
Current Portion of Long-Term Debt 606 606 606 606
Accrued Expenses 1,959 1,519 2,053 2,136
Income Taxes and Other 364 287 435 658
Total Current Liabilities $9,863 $7,985 $10,624 $11,158
Long Term Liabilities
Deferred Income Taxes and Other $2,412 $2,412 $2,412 $2,412
Long-Term Debt 17,051 16,445 16,445 16,445
Total Long Term Liabilities $10,472 $18,857 $18,857 $18,857
Total Liabilities $29,326 $26,842 $29,481 $30,015
Common Stock $68 $68 $68 $68
Additional Paid-In Capital 1,130 1,130 1,130 1,130
Retained Earnings 11,049 13,091 14,278 15,589
Shareholders' Equity $12,247 $14,289 $15,476 $16,787
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $41,573 $41,130 $44,957 $46,802
Balance Check (OK or Error) OK OK OK OK