APPENDIX

Financial Statement Analysis C

Package (FSAP)
OUTPUT FROM FSAP FOR CLOROX

Data Spreadsheet  C-2
Analysis Spreadsheet  C-6
Forecasts Spreadsheet  C-15
Forecast Development Spreadsheet   C-27
Valuation Spreadsheet  C-32

The Financial Statement Analysis Package (FSAP) that accompanies this text is a user-friendly,
adaptable series of Excel®-based spreadsheet templates. FSAP enables the user to manually input
financial statement data for a firm and then perform financial statement analysis, forecasting,
and valuation. FSAP contains five spreadsheets: Data, Analysis, Forecasts, Forecast Development,
and Valuation.
Appendix C presents the output of these spreadsheets using the data for Clorox. The output
includes the financial statement data for the fiscal years 2015–2020, a wide array of financial
ratios for the years 2016–2020, financial statement forecasts, and a variety of valuation models
applied to the forecasted data for Clorox.
FSAP contains a series of User Guides that provide line-by-line instructions on how to use
FSAP. You can download a blank FSAP template as well as the FSAP output for Clorox from this
book’s companion website, which you’ll find by going to www.cengagebrain.com and searching
for this book by its author or title. FSAP data files also are available for various problems and
cases in the book. The FSAP icon has been used throughout the book to denote potential appli-
cations for FSAP.

C-1

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 C-2 APPENDIX C Financial Statement Analysis Package (FSAP)

Data Spreadsheet

Analyst Name: Wahlen, Baginski, and Bradshaw

Company Name: Clorox
Year (Most recent in far right column.) 2015 2016 2017 2018 2019 2020
Assets:
Cash and cash equivalents 382 401 418 131 111 871
Short-term investments
Accounts and notes receivable—net 519 569 565 600 631 648
Inventories 385 443 459 506 512 454
Prepaid expenses and other current assets 143 72 72 74 51 47
Other current assets (1)
Other current assets (2)
Other current assets (3)
  Current Assets 1,429 1,485 1,514 1,311 1,305 2,020
Long-term investments
Equity and cost investments
Property, plant, and equipment—at cost 2,757 2,817 2,932 3,057 3,184 3,327
<Accumulated depreciation> (1,839) (1,911) (2,001) (2,061) (2,150) (2,224)
Operating lease right-of-use assets 0 0 0 0 0 291
Goodwill 1,067 1,197 1,196 1,602 1,591 1,577
Trademarks and other intangible assets 585 735 722 929 912 894
Other assets 165 195 210 222 274 328
  Total Assets 4,164 4,518 4,573 5,060 5,116 6,213
Liabilities and Equities:
Accounts payable 431 490 501 507 507 575
Accrued liabilities 548 545 504 494 528 754
Notes payable and short-term debt 95 523 404 199 396 0
Current maturities of long-term debt 300 400
Current operating lease liabilities 0 0 0 0 0 64
Income taxes payable 31 0 0 0 9 25
Other current liabilities (1)
Other current liabilities (2)
  Current Liabilities 1,405 1,558 1,809 1,200 1,440 1,418
Long-term debt 1,796 1,797 1,391 2,284 2,287 2,780
Long-term operating lease liabilities 0 0 0 0 0 278
Deferred tax liabilities 95 82 61 72 50 62
Other liabilities 750 784 770 778 780 767
Other noncurrent liabilities (2)
  Total Liabilities 4,046 4,221 4,031 4,334 4,557 5,305

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 APPENDIX C Financial Statement Analysis Package (FSAP) C-3

Data Spreadsheet (Continued)

Year (Most recent in far right column.) 2015 2016 2017 2018 2019 2020
Preferred stock
Common stock 1 Additional paid in capital 934 1,027 1,087 1,134 1,205 1,296
Retained earnings <deficit> 1,923 2,163 2,440 2,797 3,150 3,567
Accum. other comprehensive income <loss> (502) (570) (543) (547) (602) (640)
<Treasury stock> and other equity
adjustments (2,237) (2,323) (2,442) (2,658) (3,194) (3,315)
  Total Common Shareholders’ Equity 118 297 542 726 559 908
Noncontrolling interests
  Total Equity 118 297 542 726 559 908
  Total Liabilities and Equities 4,164 4,518 4,573 5,060 5,116 6,213

INCOME STATEMENT DATA 2015 2016 2017 2018 2019 2020

Revenues 5,655 5,761 5,973 6,124 6,214 6,721
<Cost of products sold> (3,190) (3,163) (3,302) (3,449) (3,486) (3,658)
  Gross Profit 2,465 2,598 2,671 2,675 2,728 3,063
<Selling and administrative expenses> (798) (806) (810) (837) (856) (969)
<Advertising costs> (523) (587) (599) (570) (612) (675)
<Research and development costs> (136) (141) (135) (132) (136) (145)
Add back: Imputed interest expense on
operating lease obligations 9
<Other operating expenses (1)>
<Other operating expenses (2)>
<Other operating expenses (3)>
<Non-recurring operating expenses>
Income <Loss> from equity affiliates
Non-recurring operating gains <losses>
  Operating Income 1,008 1,064 1,127 1,136 1,124 1,283
<Interest expense> (100) (88) (88) (85) (97) (99)
Subtract: Imputed interest expense on
operating lease obligations (9)
Other income <expense> 13 7 (6) 3 (3) 10
Income <Loss> from equity affiliates
Other income or gains <Other expenses or losses>
  Income before Tax 921 983 1,033 1,054 1,024 1,185
<Income tax expense> (315) (335) (330) (231) (204) (246)
Income <Loss> from discontinued operations (26) (2)
Extraordinary gains <losses>
Income <Loss> from changes in accounting
principles
  Net Income 580 648 701 823 820 939
Net income attributable to noncontrolling interests
  Net Income attributable to common
shareholders 580 648 701 823 820 939
Net Income (enter reported amount as a check) 580 648 701 823 820 939
Other comprehensive income items (85) (68) 27 (4) (16) (38)
Comprehensive Income 495 580 728 819 804 901

(Continued)

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 C-4 APPENDIX C Financial Statement Analysis Package (FSAP)

Data Spreadsheet (Continued)

STATEMENT OF CASH FLOWS DATA 2015 2016 2017 2018 2019 2020
Net Income 580 648 701 823 820 939
Add back depreciation and amortization
expenses 169 165 163 166 180 180
Add back stock-based compensation
expense 32 45 51 53 43 50
Deferred income taxes (16) 5 (35) (23) (20) (2)
<Income from equity affiliates, net of dividends>
<Increase> Decrease in accounts receivable 6 (52) (1) (24) (32) (27)
<Increase> Decrease in inventories (25) (45) (19) (21) (7) 50
<Increase> Decrease in prepaid expenses 6 6 (5) 4 (6) 2
<Increase> Decrease in other current assets
<Increase> Decrease in other noncurrent assets
Increase <Decrease> in accounts payable 93 57 (34) (47) 17 291
Increase <Decrease> in income taxes payable 29 (62) 12 1 26 14
Increase <Decrease> in other current liabilities
Operating lease right-of-use assets and
liabilities, net 0 0 19
Other addbacks to <subtractions from> net
income 0 11 35 44 (29) 30
Other operating cash flows
  Net CF from Operating Activities 874 778 868 976 992 1,546
Proceeds from sales of property, plant,
and equipment
<Property, plant, and equipment acquired> (125) (172) (231) (194) (206) (254)
<Increase> Decrease in marketable securities
Investments sold
<Investments acquired> (290) (681) 0 0
Payments for acquisitions of intangible assets
Other investing transactions 19 32 26 16 10 2
  Net CF from Investing Activities (106) (430) (205) (859) (196) (252)
Increase in short-term borrowing (48) 426 189
<Decrease in short-term borrowing> (125) (214) (396)
Increase in long-term borrowing 495 891 492
<Decrease in long-term borrowing> (575) (300) (400)
Issue of capital stock
Proceeds from stock option exercises 251 210 75 45 147 162
<Share repurchases> (434) (254) (183) (271) (661) (248)
<Dividend payments> (385) (398) (412) (450) (490) (533)
Other financing transactions (1)
Other financing transactions (2)
  Net CF from Financing Activities (696) (316) (645) (399) (815) (523)
Effects of exchange rate changes on cash (19) (13) (1) (3) (2) (5)
Changes in restricted cash (2) 1 (6)
  Net Change in Cash 53 19 17 (287) (20) 760
Cash and cash equivalents, beginning of year 329 382 401 418 131 111
Cash and cash equivalents, end of year 382 401 418 131 111 871

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 APPENDIX C Financial Statement Analysis Package (FSAP) C-5

Data Spreadsheet (Continued)

SUPPLEMENTAL DATA 2015 2016 2017 2018 2019 2020

Statutory tax rate 35.0% 35.0% 35.0% 28.1% 21.0% 21.0%
Average tax rate implied from income
statement data 34.2% 34.1% 31.9% 21.9% 19.9% 20.8%
After-tax effects of nonrecurring and unusual
items on net income (26) 0 (2) 0 0 0
Depreciation expense 157 157 153 156 165 166
Preferred stock dividends (total, if any)
Common shares outstanding 129 129 129 128 126 126
Earnings per share (basic) 4.45 5.01 5.43 6.37 6.42 7.46
Common dividends per share 2.99 3.08 3.19 3.52 3.90 4.22
Share price at fiscal year end 90.47 123.46 121.91 125.53 147.45 217.19

FINANCIAL DATA CHECKS

Assets – Liabilities – Equities 0 0 0 0 0 0
Net Income (computed) – Net Income
(reported) 0 0 0 0 0 0
Cash Changes 0 0 0 0 0

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 C-6 APPENDIX C Financial Statement Analysis Package (FSAP)

Analysis Spreadsheet

Analyst Name: Wahlen, Baginski, and Bradshaw

Company Name: Clorox
DATA CHECKS
Assets – Liabilities – Equities 0 0 0 0 0
Net Income (computed) – Net Income (reported) 0 0 0 0 0
Cash Changes 0 0 0 0

PROFITABILITY FACTORS: 2016 2017 2018 2019 2020

RETURN ON ASSETS (based on reported amounts):
   Profit Margin for ROA 12.3% 12.7% 14.5% 14.4% 15.2%
3 Asset Turnover 1.3 1.3 1.3 1.2 1.2
5 Return on Assets 16.3% 16.7% 18.5% 17.6% 18.1%
RETURN ON ASSETS (excluding the effects of nonrecurring items):
   Profit Margin for ROA 12.3% 12.8% 14.5% 14.4% 15.2%
3 Asset Turnover 1.3 1.3 1.3 1.2 1.2
5 Return on Assets 16.3% 16.8% 18.5% 17.6% 18.1%
RETURN ON COMMON EQUITY (based on reported amounts):
   Profit Margin for ROCE 11.2% 11.7% 13.4% 13.2% 14.0%
3 Asset Turnover 1.3 1.3 1.3 1.2 1.2
3 Capital Structure Leverage 20.9 10.8 7.6 7.9 7.7
5 Return on Common Equity 312.3% 167.1% 129.8% 127.6% 128.0%
RETURN ON COMMON EQUITY (excluding the effects of nonrecurring items):
   Profit Margin for ROCE 11.2% 11.8% 13.4% 13.2% 14.0%
3 Asset Turnover 1.3 1.3 1.3 1.2 1.2
3 Capital Structure Leverage 20.9 10.8 7.6 7.9 7.7
5 Return on Common Equity 312.3% 167.6% 129.8% 127.6% 128.0%
OPERATING PERFORMANCE:
Gross Profit / Revenues 45.1% 44.7% 43.7% 43.9% 45.6%
Operating Profit / Revenues 18.5% 18.9% 18.5% 18.1% 19.1%
Net Income / Revenues 11.2% 11.7% 13.4% 13.2% 14.0%
Comprehensive Income / Revenues 10.1% 12.2% 13.4% 12.9% 13.4%
PERSISTENT OPERATING PERFORMANCE (excluding the effects of nonrecurring items):
Persistent Operating Profit / Revenues 18.5% 18.9% 18.5% 18.1% 19.1%
Persistent Net Income / Revenues 11.2% 11.8% 13.4% 13.2% 14.0%
GROWTH RATES:
Revenue Growth 1.9% 3.7% 2.5% 1.5% 8.2%
Net Income Growth 11.7% 8.2% 17.4% (0.4%) 14.5%
Persistent Net Income Growth 6.9% 8.5% 17.1% (0.4%) 14.5%

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 APPENDIX C Financial Statement Analysis Package (FSAP) C-7

Analysis Spreadsheet (Continued)

PROFITABILITY FACTORS: 2016 2017 2018 2019 2020

OPERATING CONTROL:
Gross Profit Control Index 103.5% 99.2% 97.7% 100.5% 103.8%
Operating Profit Contol Index 103.6% 102.2% 98.3% 97.5% 105.5%
Net Profit Contol Index 109.7% 104.3% 114.5% 98.2% 105.9%
Profit Margin Decomposition:
Gross Profit Margin 45.1% 44.7% 43.7% 43.9% 45.6%
Operating Profit Index 41.0% 42.2% 42.5% 41.2% 41.9%
Leverage Index 92.4% 91.7% 92.8% 91.1% 92.4%
Tax Index 65.9% 67.9% 78.1% 80.1% 79.2%
Net Profit Margin 11.2% 11.7% 13.4% 13.2% 14.0%

Comprehensive Income Performance:

Comprehensive Income Index 89.5% 103.9% 99.5% 98.0% 96.0%
Comprehensive Income Margin 10.1% 12.2% 13.4% 12.9% 13.4%

RISK FACTORS: 2016 2017 2018 2019 2020

LIQUIDITY:
Current Ratio 0.95 0.84 1.09 0.91 1.42
Quick Ratio 0.62 0.54 0.61 0.52 1.07
Operating Cash Flow to Current Liabilities 52.5% 51.6% 64.9% 75.2% 108.2%
ASSET TURNOVER:
Cash Turnover 14.7 14.6 22.3 51.4 13.7
   Days Sales Held in Cash 24.8 25.0 16.4 7.1 26.7
Accounts Receivable Turnover 10.6 10.5 10.5 10.1 10.5
   Days Receivables Held 34 35 35 36 35
Inventory Turnover 7.6 7.3 7.1 6.8 7.6
   Days Inventory Held 48 50 51 53 48
Accounts Payable Turnover 7.0 6.7 6.9 6.9 6.7
   Days Payables Held 52 55 53 53 55
Net Working Capital Days 30 30 33 36 28
Revenues / Average Net Fixed Assets 6.3 6.5 6.4 6.1 6.3
CAPEX Index 1.1 1.5 1.2 1.2 1.5
Expected Useful Life of PPE for Depreciation 17.8 18.8 19.2 18.9 19.6
Expected Remaining Useful Life of PPE 5.8 6.1 6.4 6.3 6.6
SOLVENCY:
Total Liabilities / Total Assets 93.4% 88.1% 85.7% 89.1% 85.4%
Total Liabilities / Total Equity 1421.2% 743.7% 597.0% 815.2% 584.3%
LT Debt / LT Capital 85.8% 72.0% 75.9% 80.4% 75.4%
LT Debt / Total Equity 605.1% 256.6% 314.6% 409.1% 306.2%
Operating Cash Flow to Total Liabilities 18.8% 21.0% 23.3% 22.3% 31.4%
Interest Coverage Ratio (reported amounts) 12.2 12.7 13.4 11.6 13.0
Interest Coverage ratio (recurring amounts) 12.2 12.7 13.4 11.6 13.0

(Continued)

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 C-8 APPENDIX C Financial Statement Analysis Package (FSAP)

Analysis Spreadsheet (Continued)

RISK FACTORS: 2016 2017 2018 2019 2020

Bankruptcy Predictors:
Altman Z Score 4.91 5.07 4.92 5.15 5.73
  Bankruptcy Probability 0.00% 0.00% 0.00% 0.00% 0.00%
Earnings Manipulation Predictors:
Beneish Earnings Manipulation Score (2.50) (2.63) (2.48) (2.62) (2.98)
   Earnings Manipulation Probability 0.62% 0.43% 0.66% 0.44% 0.15%
DIVIDEND and STOCK MARKET-BASED RATIOS:
Stock Returns 39.9% 1.3% 5.9% 20.6% 50.2%
Price-Earnings Ratio (reported amounts) 24.6 22.5 19.7 23.0 29.1
Price-Earnings Ratio (recurring amounts) 24.6 22.4 19.7 23.0 29.1
Market Value to Book Value Ratio 53.8 29.0 22.1 33.2 30.2
Common Dividends per Share $3.08 $3.19 $3.52 $3.90 $4.22
Common Dividend Payout (% of Net Income) 61.4% 58.8% 54.7% 59.8% 56.8%
Common Dividend Yield (% of Share Price) 2.5% 2.6% 2.8% 2.6% 1.9%

INCOME STATEMENT ITEMS AS A PERCENT OF REVENUES:

2016 2017 2018 2019 2020
Revenues 100.0% 100.0% 100.0% 100.0% 100.0%
<Cost of products sold> (54.9%) (55.3%) (56.3%) (56.1%) (54.4%)
  Gross Profit 45.1% 44.7% 43.7% 43.9% 45.6%
<Selling and administrative expenses> (14.0%) (13.6%) (13.7%) (13.8%) (14.4%)
<Advertising costs> (10.2%) (10.0%) (9.3%) (9.8%) (10.0%)
<Research and development costs> (2.4%) (2.3%) (2.2%) (2.2%) (2.2%)
<Other operating expenses (1)>
<Other operating expenses (2)>
<Other operating expenses (3)>
<Non-recurring operating expenses>
Income <Loss> from equity affiliates
Non-recurring operating gains <losses>
  Operating Income 18.5% 18.9% 18.5% 18.1% 19.1%
<Interest expense> (1.5%) (1.5%) (1.4%) (1.6%) (1.5%)
Other income <expense> 0.1% (0.1%) 0.0% 0.0% 0.1%
Income <Loss> from equity affiliates
Other income or gains <Other expenses or losses>
  Income before Tax 17.1% 17.3% 17.2% 16.5% 17.6%
<Income tax expense> (5.8%) (5.5%) (3.8%) (3.3%) (3.7%)
Income <Loss> from discontinued operations 0.0%
Extraordinary gains <losses>
Income <Loss> from changes in accounting principles
  Net Income 11.2% 11.7% 13.4% 13.2% 14.0%
Net income attributable to noncontrolling interests
  Net Income attributable to common
11.2% 11.7% 13.4% 13.2% 14.0%
  shareholders
Other comprehensive income items (1.2%) 0.5% (0.1%) (0.3%) (0.6%)
Comprehensive Income 10.1% 12.2% 13.4% 12.9% 13.4%

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 APPENDIX C Financial Statement Analysis Package (FSAP) C-9

Analysis Spreadsheet (Continued)

INCOME STATEMENT ITEMS: GROWTH RATES

2016 2017 2018 2019 2020
YEAR TO YEAR GROWTH RATES: CAGR:
Revenues 1.9% 3.7% 2.5% 1.5% 8.2% 3.5%
<Cost of products sold> (0.8%) 4.4% 4.5% 1.1% 4.9% 2.8%
  Gross Profit 5.4% 2.8% 0.1% 2.0% 12.3% 4.4%
<Selling and administrative
1.0% 0.5% 3.3% 2.3% 13.2% 4.0%
expenses>
<Advertising costs> 12.2% 2.0% (4.8%) 7.4% 10.3% 5.2%
<Research and development costs> 3.7% (4.3%) (2.2%) 3.0% 6.6% 1.3%
<Other operating expenses (1)>
<Other operating expenses (2)>
<Other operating expenses (3)>
<Non-recurring operating expenses>
Income <Loss> from equity affiliates
Non-recurring operating gains <losses>
  Operating Income 5.6% 5.9% 0.8% (1.1%) 14.1% 4.9%
<Interest expense> (12.0%) 0.0% (3.4%) 14.1% 2.1% (0.2%)
Other income <expense> (46.2%) (185.7%) (150.0%) (200.0%) (433.3%) (5.1%)
Income <Loss> from equity affiliates
Other income or gains <Other expenses or losses>
  Income before Tax 6.7% 5.1% 2.0% (2.8%) 15.7% 5.2%
<Income tax expense> 6.3% (1.5%) (30.0%) (11.7%) 20.6% (4.8%)
Income <Loss> from discontinued
(100.0%) (100.0%) (100.0%)
operations
Extraordinary gains <losses>
Income <Loss> from changes in accounting principles
  Net Income 11.7% 8.2% 17.4% (0.4%) 14.5% 10.1%
Net income attributable to noncontrolling interests
  Net Income attributable to
  common shareholders 11.7% 8.2% 17.4% (0.4%) 14.5% 10.1%
Other comprehensive income items (20.0%) (139.7%) (114.8%) 300.0% 137.5% (14.9%)
Comprehensive Income 17.2% 25.5% 12.5% (1.8%) 12.1% 12.7%

(Continued)

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 C-10 APPENDIX C Financial Statement Analysis Package (FSAP)

Analysis Spreadsheet (Continued)

COMMON SIZE BALANCE SHEET—AS A PERCENT OF TOTAL ASSETS

2016 2017 2018 2019 2020
Assets:
Cash and cash equivalents 8.9% 9.1% 2.6% 2.2% 14.0%
Short-term investments
Accounts and notes receivable—net 12.6% 12.4% 11.9% 12.3% 10.4%
Inventories 9.8% 10.0% 10.0% 10.0% 7.3%
Prepaid expenses and other current assets 1.6% 1.6% 1.5% 1.0% 0.8%
Other current assets (1)
Other current assets (2)
Other current assets (3)
  Current Assets 32.9% 33.1% 25.9% 25.5% 32.5%
Long-term investments
Equity and cost investments
Property, plant, and equipment—at cost 62.4% 64.1% 60.4% 62.2% 53.5%
<Accumulated depreciation> (42.3%) (43.8%) (40.7%) (42.0%) (35.8%)
Operating lease right-of-use assets 4.7%
Goodwill 26.5% 26.2% 31.7% 31.1% 25.4%
Trademarks and other intangible assets 16.3% 15.8% 18.4% 17.8% 14.4%
Other assets 4.3% 4.6% 4.4% 5.4% 5.3%
  Total Assets 100.0% 100.0% 100.0% 100.0% 100.0%
Liabilities and Equities:
Accounts payable 10.8% 11.0% 10.0% 9.9% 9.3%
Accrued liabilities 12.1% 11.0% 9.8% 10.3% 12.1%
Notes payable and short-term debt 11.6% 8.8% 3.9% 7.7%
Current maturities of long-term debt 8.7%
Current operating lease liabilities 1.0%
Income taxes payable 0.2% 0.4%
Other current liabilities (1)
Other current liabilities (2)
  Current Liabilities 34.5% 39.6% 23.7% 28.1% 22.8%
Long-term debt 39.8% 30.4% 45.1% 44.7% 44.7%
Long-term operating lease liabilities 4.5%
Deferred tax liabilities 1.8% 1.3% 1.4% 1.0% 1.0%
Other liabilities 17.4% 16.8% 15.4% 15.2% 12.3%
Other noncurrent liabilities (2)
  Total Liabilities 93.4% 88.1% 85.7% 89.1% 85.4%
Preferred stock
Common stock 1 Additional paid in capital 22.7% 23.8% 22.4% 23.6% 20.9%
Retained earnings <deficit> 47.9% 53.4% 55.3% 61.6% 57.4%
Accum. other comprehensive income <loss> (12.6%) (11.9%) (10.8%) (11.8%) (10.3%)
<Treasury stock> and other equity adjustments (51.4%) (53.4%) (52.5%) (62.4%) (53.4%)
Total Common Shareholders’ Equity 6.6% 11.9% 14.3% 10.9% 14.6%
Noncontrolling interests
  Total Equity 6.6% 11.9% 14.3% 10.9% 14.6%
  Total Liabilities and Equities 100.0% 100.0% 100.0% 100.0% 100.0%

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 APPENDIX C Financial Statement Analysis Package (FSAP) C-11

Analysis Spreadsheet (Continued)

BALANCE SHEET ITEMS: GROWTH RATES

2016 2017 2018 2019 2020
YEAR TO YEAR GROWTH RATES: CAGR:
Assets:
Cash and cash equivalents 5.0% 4.2% (68.7%) (15.3%) 684.7% 17.9%
Short-term investments
Accounts and notes receivable—net 9.6% (0.7%) 6.2% 5.2% 2.7% 4.5%
Inventories 15.1% 3.6% 10.2% 1.2% (11.3%) 3.4%
Prepaid expenses and other current
(49.7%) 0.0% 2.8% (31.1%) (7.8%) (20.0%)
assets
Other current assets (1)
Other current assets (2)
Other current assets (3)
  Current Assets 3.9% 2.0% (13.4%) (0.5%) 54.8% 7.2%
Long-term investments
Equity and cost investments
Property, plant, and equipment—at
2.2% 4.1% 4.3% 4.2% 4.5% 3.8%
cost
<Accumulated depreciation> 3.9% 4.7% 3.0% 4.3% 3.4% 3.9%
Operating lease right-of-use assets
Goodwill 12.2% (0.1%) 33.9% (0.7%) (0.9%) 21.9%
Trademarks and other intangible
25.6% (1.8%) 28.7% (1.8%) (2.0%) 40.2%
assets
Other assets 18.2% 7.7% 5.7% 23.4% 19.7% (39.8%)
  Total Assets 8.5% 1.2% 10.6% 1.1% 21.4% 8.3%
Liabilities and Equities:
Accounts payable 13.7% 2.2% 1.2% 0.0% 13.4% 5.9%
Accrued liabilities (0.5%) (7.5%) (2.0%) 6.9% 42.8% 6.6%
Notes payable and short-term debt 450.5% (22.8%) (50.7%) 99.0% (100.0%) (100.0%)
Current maturities of long-term debt (100.0%) (100.0%) (100.0%)
Current operating lease liabilities
Income taxes payable (100.0%) 177.8% (4.2%)
Other current liabilities (1)
Other current liabilities (2)
  Current Liabilities 10.9% 16.1% (33.7%) 20.0% (1.5%) 0.2%
Long-term debt 0.1% (22.6%) 64.2% 0.1% 21.6% 9.1%
Long-term operating lease liabilities
Deferred tax liabilities (13.7%) (25.6%) 18.0% (30.6%) 24.0% (8.2%)
Other liabilities 4.5% (1.8%) 1.0% 0.3% (1.7%) 0.4%
Other noncurrent liabilities (2)
  Total Liabilities 4.3% (4.5%) 7.5% 5.1% 16.4% 5.6%

(Continued)

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 C-12 APPENDIX C Financial Statement Analysis Package (FSAP)

Analysis Spreadsheet (Continued)

BALANCE SHEET ITEMS: GROWTH RATES

2016 2017 2018 2019 2020
Preferred stock
Common stock 1 Additional paid in
capital 10.0% 5.8% 4.3% 6.3% 7.6% 6.8%
Retained earnings <deficit> 12.5% 12.8% 14.6% 12.6% 13.2% 13.2%
Accum. other comprehensive
income <loss> 13.5% (4.7%) 0.7% 10.1% 6.3% 5.0%
<Treasury stock> and other equity
3.8% 5.1% 8.8% 20.2% 3.8% 8.2%
adjustments
  Total Common Shareholders’
151.7% 82.5% 33.9% (23.0%) 62.4% 50.4%
Equity
Noncontrolling interests
  Total Equity 151.7% 82.5% 33.9% (23.0%) 62.4% 50.4%
  Total Liabilities and Equities 8.5% 1.2% 10.6% 1.1% 21.4% 8.3%

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 APPENDIX C Financial Statement Analysis Package (FSAP) C-13

Analysis Spreadsheet (Continued)

RETURN ON ASSETS ANALYSIS (excluding the effects of non-recurring items)

Level 1 RETURN ON ASSETS
2018 2019 2020
18.5% 17.6% 18.1%
Level 2 PROFIT MARGIN FOR ROA ASSET TURNOVER
2018 2019 2020 2018 2019 2020
14.5% 14.4% 15.2% 1.3 1.2 1.2
Level 3 2018 2019 2020 2018 2019 2020 Turnovers:
Revenues 100.0% 100.0% 100.0% 10.5 10.1 10.5 Receivables
<Cost of products sold> (56.3%) (56.1%) (54.4%) 7.1 6.8 7.6 Inventory
  Gross Profit 43.7% 43.9% 45.6% 6.4 6.1 6.3 Fixed Assets
<Selling and administrative expenses> (13.7%) (13.8%) (14.4%)
  Operating Income 18.5% 18.1% 19.1%
  Income before Tax 17.2% 16.5% 17.6%
<Income tax expense> (3.8%) (3.3%) (3.7%)
Profit Margin for ROA* 14.5% 14.4% 15.2%
*Amounts do not sum.

RETURN ON COMMON SHAREHOLDERS’ EQUITY ANALYSIS (excluding the effects of non-recurring items)
2018 2019 2020
129.8% 127.6% 128.0%
2018 2019 2020
PROFIT MARGIN FOR ROCE 13.4% 13.2% 14.0%
ASSET TURNOVER 1.3 1.2 1.2
CAPITAL STRUCTURE LEVERAGE 7.6 7.9 7.7

RETURN ON COMMON SHAREHOLDERS’ EQUITY ANALYSIS: Alternative Approach to Disaggregation

2018 2019 2020
ROCE 129.8% 127.6% 128.0%
INPUT VARIABLES
Total Revenues 6,124 6,214 6,721
Net Operating Profit After Tax (NOPAT) 889 898 1,024
Net Financing Expense After Tax 66 78 85
Average Net Operating Assets 2,973 3,226 3,465
Average Financing Obligations 2,339 2,583 2,732
Average Common Equity 634 643 734
Profit margin for operating ROA 0.145 0.144 0.152
Net operating asset turnover 2.060 1.927 1.940
Operating ROA (NOPAT/Average NOA) 0.299 0.278 0.296
Net Borrowing Rate 0.028 0.030 0.031
Spread 0.271 0.248 0.264
Leverage 3.689 4.020 3.724
Leverage*Spread 0.999 0.998 0.985
ROCE 5 Operating ROA1Leverage*Spread 1.298 1.276 1.280

(Continued)

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 C-14 APPENDIX C Financial Statement Analysis Package (FSAP)

Analysis Spreadsheet (Continued)

STATEMENT OF CASH FLOWS: SUMMARY

Year 2016 2017 2018 2019 2020
Operating Activities:
Net Income 648 701 823 820 939
Add back depreciation and amortization expenses 165 163 166 180 180
Net cash flows for working capital (96) (47) (87) (2) 349
Other net addbacks/subtractions 61 51 74 (6) 78
  Net CF from Operating Activities 778 868 976 992 1,546
Investing Activities:
Capital expenditures (net) (172) (231) (194) (206) (254)
Investments (290) 0 (681) 0 0
Other investing transactions 32 (6) 16 10 2
  Net CF from Investing Activities (430) (205) (859) (196) (252)
Financing Activities:
Net proceeds from short-term borrowing 426 (125) (214) 189 (396)
Net proceeds from long-term borrowing (300) 0 491 0 492
Net proceeds from share issues and repurchases (44) (108) (226) (514) (86)
Dividends (398) (412) (450) (490) (533)
Other financing transactions 0 0 0 0 0
  Net CF from Financing Activities (316) (645) (399) (815) (523)
Effects of exchange rate changes on cash (13) (1) (3) (2) (5)
  Net Change in Cash 19 17 (285) (21) 766

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 Forecasts Spreadsheet
FSAP OUTPUT: FINANCIAL STATEMENT FORECASTS

22091_bm_appC_hr_C1-C40.indd 15
Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
Row Format: Row Format:
Actual Amounts Forecast Amounts Year 16 and beyond:
Common Size Percentage Forecast assumption Long-Run Growth Rate: 3.0%
Rate of Change Percentage Forecast assumption explanation Long-Run Growth Factor: 103.0%
Historical Figures: Forecasts:
Year 2018 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
INCOME STATEMENT
Revenues 6,124.0 6,214.0 6,721.0 7,699.5 7,959.0 8,229.6 8,461.4 8,701.7 8,962.8
common size 100.0% 100.0% 100.0% 14.6% 3.4% 3.4% 2.8% 2.8%
rate of change 1.5% 8.2% See Forecast Development worksheet for details of revenues forecasts.
APPENDIX C

<Cost of products sold> (3,449.0) (3,486.0) (3,658.0) (4,157.7) (4,377.5) (4,526.3) (4,738.4) (4,873.0) (5,019.1)
common size (56.3%) (56.1%) (54.4%) (54.0%) (55.0%) (55.0%) (56.0%) (56.0%)
rate of change 1.1% 4.9% See Forecast Development worksheet.
  Gross Profit 2,675.0 2,728.0 3,063.0 3,541.8 3,581.6 3,703.3 3,723.0 3,828.8 3,943.6
  common size 43.7% 43.9% 45.6% 46.0% 45.0% 45.0% 44.0% 44.0% 44.0%
   rate of change 2.0% 12.3% 15.6% 1.1% 3.4% 0.5% 2.8%
<Selling and administrative expenses> (837.0) (856.0) (969.0) (1,110.1) (1,147.5) (1,186.5) (1,219.9) (1,254.6) (1,292.2)
  common size (13.7%) (13.8%) (14.4%) (14.4%) (14.4%) (14.4%) (14.4%) (14.4%)
   rate of change 2.3% 13.2% Assume a steady percentage of sales, consistent with most recent year.
<Advertising costs> (570.0) (612.0) (675.0) (785.4) (827.7) (872.3) (913.8) (957.2) (985.9)
  common size (9.3%) (9.8%) (10.0%) (10.2%) (10.4%) (10.6%) (10.8%) (11.0%)
   rate of change 7.4% 10.3% Assume small increases as a percentage of sales, consistent with recent years.
Financial Statement Analysis Package (FSAP)

<Research and development costs> (132.0) (136.0) (145.0) (169.4) (175.1) (181.1) (186.2) (191.4) (197.2)
  common size (2.2%) (2.2%) (2.2%) (2.2%) (2.2%) (2.2%) (2.2%) (2.2%)
   rate of change 3.0% 6.6% Assume steady 2.2% of sales, consistent with recent years.
Add back: Imputed interest expense on
operating lease obligations 0.0 0.0 8.5 8.9 9.6 10.3 11.1 11.9 12.2
  common size 0.0% 0.0% 0.1% 2.5% 2.5% 2.5% 2.5% 2.5%
   rate of change Weighted average interest rate on average operating lease obligations.
<Other operating expenses (1)> 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
   rate of change Explain assumptions.
C-15

(Continued)

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 Forecasts Spreadsheet (Continued) C-16

<Other operating expenses (2)> 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
   rate of change Explain assumptions.
<Other operating expenses (3)> 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

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  common size 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
   rate of change Explain assumptions.
<Non-recurring operating expenses> 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
   rate of change Explain assumptions.
Income <Loss> from equity affiliates 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
   rate of change Explain assumptions.
APPENDIX C

Non-recurring operating gains <losses> 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
   rate of change Explain assumptions.
  Operating Income 1,136.0 1,124.0 1,282.5 1,485.9 1,440.9 1,473.8 1,414.2 1,437.4 1,480.5
  common size 18.5% 18.1% 19.1% 19.3% 18.1% 17.9% 16.7% 16.5% 16.5%
   rate of change (1.1%) 14.1% 15.9% (3.0%) 2.3% (4.0%) 1.6%
<Interest expense> (85.0) (97.0) (99.0) (87.6) (87.6) (87.6) (87.6) (87.6) (90.2)
  common size (1.4%) (1.6%) (1.5%) 3.15% 3.15% 3.15% 3.15% 3.15%
Weighted average interest rate on average balance in financial liabilities.
   rate of change 14.1% 2.1% See Forecast Development.
Subtract: Imputed interest expense on
operating lease obligations 0.0 0.0 (8.5) (8.9) (9.6) (10.3) (11.1) (11.9) (12.2)
  common size 0.0% 0.0% (0.1%) 2.5% 2.5% 2.5% 2.5% 2.5%
Financial Statement Analysis Package (FSAP)

   rate of change Weighted average interest rate on average operating lease obligations.
Other income <expense> 3.0 (3.0) 10.0 7.8 6.3 5.3 4.8 4.3 4.4
  common size 0.0% 0.0% 0.1% 1.00% 1.00% 1.00% 1.00% 1.00%
   rate of change (200.0%) (433.3%) Assume low rate of return on financial assets.
Income <Loss> from equity affiliates 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
   rate of change Explain assumptions.
Other income or gains <Other expenses or
losses> 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
   rate of change Explain assumptions.
  Income before Tax 1,054.0 1,024.0 1,185.0 1,397.2 1,350.0 1,381.2 1,320.3 1,342.3 1,382.6
  common size 17.2% 16.5% 17.6% 18.1% 17.0% 16.8% 15.6% 15.4% 15.4%
   rate of change (2.8%) 15.7% 17.9% (3.4%) 2.3% (4.4%) 1.7%

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 Forecasts Spreadsheet (Continued)

Historical Figures: Forecasts:

22091_bm_appC_hr_C1-C40.indd 17
Year 2018 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
<Income tax expense> (231.0) (204.0) (46.0) (293.4) (283.5) (290.0) (277.3) (281.9) (290.3)
   effective tax rates (21.9%) (19.9%) (20.8%) (21.0%) (21.0%) (21.0%) (21.0%) (21.0%)
   rate of change (11.7%) 20.6% Effective income tax rate assumptions.
Income <Loss> from discontinued
operations 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
   rate of change Explain assumptions.
Income <Loss> from changes in
accounting principles 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
   rate of change Explain assumptions.
  Net Income 823.0 820.0 939.0 1,103.8 1,066.5 1,091.1 1,043.1 1,060.4 1,092.2
APPENDIX C

  common size 13.4% 13.2% 14.0% 14.3% 13.4% 13.3% 12.3% 12.2% 12.2%
   rate of change (0.4%) 14.5% 17.6% (3.4%) 2.3% (4.4%) 1.7% 3.0%
Net income attributable to noncontrolling
interests 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0.0 0.0 0.0 0.0 0.0
   rate of change Explain assumptions.
Net Income attributable to common
shareholders 823.0 820.0 939.0 1,103.8 1,066.5 1,091.1 1,043.1 1,060.4 1,092.2
  common size 13.4% 13.2% 14.0% 14.3% 13.4% 13.3% 12.3% 12.2% 12.2%
   rate of change (0.4%) 14.5% 17.6% (3.4%) 2.3% (4.4%) 1.7% 3.0%
Other comprehensive income items (4.0) (16.0) (38.0) 0.0 0.0 0.0 0.0 0.0 0.0
  common size (0.1%) (0.3%) (0.6%) 0.0 0.0 0.0 0.0 0.0
Financial Statement Analysis Package (FSAP)

   rate of change 300.0% 137.5% Assume random walk, mean zero.

Comprehensive Income 819.0 804.0 901.0 1,103.8 1,066.5 1,091.1 1,043.1 1,060.4 1,092.2
  common size 13.4% 12.9% 13.4% 14.3% 13.4% 13.3% 12.3% 12.2% 12.2%
   rate of change (1.8%) 12.1% 22.5% (3.4%) 2.3% (4.4%) 1.7% 3.0%

(Continued)
C-17

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 FINANCIAL STATEMENT FORECASTS C-18

FSAP OUTPUT:
Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
Row Format: Row Format:

22091_bm_appC_hr_C1-C40.indd 18
Actual Amounts Forecast Amounts Year 16 and beyond:
Common Size Percent Forecast assumption Long-Run Growth Rate: 3.0%
Rate of Change Percent Forecast assumption explanation Long-Run Growth Factor: 103.0%
Historical Figures: Forecasts:
Year 2018 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
BALANCE SHEET
ASSETS:
APPENDIX C

Cash and cash equivalents 131.0 111.0 871.0 696.8 557.4 501.7 451.5 406.4 418.6
common size 2.6% 2.2% 14.0% (20.0%) (20.0%) (10.0%) (10.0%) (10.0%)
rate of change (15.3%) 684.7% Assume steady decline in cash holdings.
Short-term investments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
common size 0.0% 0.0% 0.0% 0% 0% 0% 0% 0%
rate of change Explain assumptions
Accounts and notes receivable—net 600.0 631.0 648.0 742.3 767.4 793.4 815.8 839.0 864.1
common size 11.9% 12.3% 10.4% 14.6% 3.4% 3.4% 2.8% 2.8%
rate of change 5.2% 2.7% Receivables growth, primarily growth by sales growth
Inventories 506.0 512.0 454.0 546.8 575.7 595.2 623.1 640.8 660.1
common size 10.0% 10.0% 7.3% 48.0 48.0 48.0 48.0 48.0
rate of change 1.2% (11.3%) Assume steady 48 day inventory turnover
Prepaid expenses and other current assets 74.0 51.0 47.0 47.5 47.9 48.4 48.9 49.4 50.9
Financial Statement Analysis Package (FSAP)

common size 1.5% 1.0% 0.8% 1.0% 1.0% 1.0% 1.0% 1.0%
rate of change (31.1%) (7.8%) Assume slow and steady 1% growth.
Other current assets (1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
common size 0.0% 0.0% 0.0% 0% 0% 0% 0% 0%
rate of change Explain assumptions
Other current assets (2) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
common size 0.0% 0.0% 0.0% 0% 0% 0% 0% 0%
rate of change Explain assumptions
Other current assets (3) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
common size 0.0% 0.0% 0.0% 0% 0% 0% 0% 0%
rate of change Explain assumptions
  Current Assets 1,311.0 1,305.0 2,020.0 2,033.4 1,948.4 1,938.8 1,939.4 1,935.6 1,993.6
common size 25.9% 25.5% 32.5% 32.0% 30.6% 30.0% 29.6% 29.2% 29.2%
rate of change (0.5%) 54.8% 0.7% (4.2%) (0.5%) 0.0% (0.2%) 3.0%

12/15/21 8:31 PM
 Long-term investments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
common size 0.0% 0.0% 0.0% 0% 0% 0% 0% 0%
rate of change Explain assumptions

22091_bm_appC_hr_C1-C40.indd 19
Equity and cost investments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
common size 0.0% 0.0% 0.0% 0% 0% 0% 0% 0%
rate of change Explain assumptions
Property, plant, and equipment – at cost 3,057.0 3,184.0 3,327.0 3,619.6 3,898.1 4,186.2 4,482.3 4,786.9 4,930.5
common size 60.4% 62.2% 53.5%
rate of change 4.2% 4.5% PP&E assumptions—see schedule in forecast development
<Accumulated depreciation> (2,061.0) (2,150.0) (2,224.0) (2,417.0) (2,625.5) (2,850.1) (3,091.0) (3,348.9) (3,449.4)
common size (40.7%) (42.0%) (35.8%)
rate of change 4.3% 3.4% See depreciation schedule in forecast development worksheet.
Operating lease right-of-use assets 0.0 0.0 291.0 316.6 341.0 366.1 392.1 418.7 431.3
common size 0.0% 0.0% 4.7% 8.8% 7.7% 7.4% 7.1% 6.8%
rate of change Assume growth to be roughly consistent with growth in PP&E.
Goodwill 1,602.0 1,591.0 1,577.0 1,577.0 1,577.0 1,577.0 1,577.0 1,577.0 1,624.3
APPENDIX C

common size 31.7% 31.1% 25.4% 0% 0% 0% 0% 0%

rate of change (0.7%) (0.9%)Assume no growth in goodwill.
Trademarks and other intangible assets 929.0 912.0 894.0 881.0 869.0 857.0 846.0 836.0 861.1
common size 18.4% 17.8% 14.4% 13.0 12.00 12.00 11.00 10.00
rate of change (1.8%) (2.0%)Reduced by projected annual amortization expenses (Note 5).
Other assets 222.0 274.0 328.0 344.4 361.6 379.7 398.7 418.6 431.2
common size 4.4% 5.4% 5.3% 5.0% 5.0% 5.0% 5.0% 5.0%
rate of change 23.4% 19.7% Assume 5% growth.
Total Assets 5,060.0 5,116.0 6,213.0 6,354.9 6,369.6 6,454.8 6,544.4 6,623.9 6,822.6
common size 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
rate of change 1.1% 21.4% 2.3% 0.2% 1.3% 1.4% 1.2% 3.0%
Financial Statement Analysis Package (FSAP)

LIABILITIES:
Accounts payable 507.0 507.0 575.0 628.8 651.9 672.5 705.1 723.5 745.3
common size 10.0% 9.9% 9.3% 54.0 54.0 54.0 54.0 54.0
rate of change 0.0% 13.4% Assume steady 54 day payable period, consistent with recent performance.
Accrued liabilities 494.0 528.0 754.0 863.8 892.9 923.2 949.2 976.2 1,005.5
common size 9.8% 10.3% 12.1% 14.6% 3.4% 3.4% 2.8% 2.8%
rate of change 6.9% 42.8% Assume growth with sales

(Continued)
C-19

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 Forecasts Spreadsheet (Continued) C-20

Historical Figures: Forecasts:

Year 2018 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
Notes payable and short-term debt 199.0 396.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

22091_bm_appC_hr_C1-C40.indd 20
common size 3.9% 7.7% 0.0% 0% 0% 0% 0% 0%
rate of change 99.0% (100.0%)Explain assumptions.
Current maturities of long-term debt 0.0 0.0 0.0 300.0 600.0 0.0 500.0 0.0 0.0
common size 0.0% 0.0% 0.0% 300.0 600.0 0.0 500.0 0.0
rate of change Assume maturities of long-term debt are replaced with new debt.
Current operating lease liabilities 0.0 0.0 64.0 69.6 75.0 80.5 86.2 92.1 94.8
common size 0.0% 0.0% 1.0% 8.8% 7.7% 7.4% 7.1% 6.8%
APPENDIX C

rate of change Assume growth will be consistent with growth in right of use assets.
Income taxes payable 0.0 9.0 25.0 29.8 28.8 29.5 28.2 28.6 29.5
common size 0.0% 0.2% 0.4% 19.3% (3.4%) 2.3% (4.4%) 1.7%
rate of change 177.8% Assume growth with growth in income tax provision.
Other current liabilities (1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
common size 0.0% 0.0% 0.0% 0% 0% 0% 0% 0%
rate of change Explain assumptions.
Other current liabilities (2) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
common size 0.0% 0.0% 0.0% 0% 0% 0% 0% 0%
rate of change Explain assumptions.
Current Liabilities 1,200.0 1,440.0 1,418.0 1,892.1 2,248.6 1,705.8 2,268.8 1,820.5 1,875.1
common size 23.7% 28.1% 22.8% 29.8% 35.3% 26.4% 34.7% 27.5% 27.5%
Financial Statement Analysis Package (FSAP)

rate of change 20.0% (1.5%) 33.4% 18.8% (24.1%) 33.0% (19.8%)

Long-term debt 2,284.0 2,287.0 2,780.0 2,480.0 2,180.0 2,780.0 2,280.0 2,780.0 2,863.4
common size 45.1% 44.7% 44.7% 300.0 600.0 0.0 500.0 0.0
See long-term debt note for maturities (Note 7). Assume new debt issues
rate of change 0.1% 21.6% will replace maturities.
Long-term operating lease liabilities 0.0 0.0 278.0 302.4 325.7 349.8 374.5 400.0 412.0
common size 0.0% 0.0% 4.5% 8.8% 7.7% 7.4% 7.1% 6.8%
rate of change Assume growth will be consistent with growth in right of use assets.
Deferred tax liabilities 72.0 50.0 62.0 74.0 71.4 73.1 69.9 71.0 73.2
common size 1.4% 1.0% 1.0% 19.3% (3.4%) 2.3% (4.4%) 1.7%
rate of change (30.6%) 24.0% Assume growth with growth in the tax provision.
Other liabilities 778.0 780.0 767.0 767.0 767.0 767.0 767.0 767.0 790.0
common size 15.4% 15.2% 12.3% 0% 0% 0% 0% 0%
rate of change 0.3% (1.7%)Assume steady state, no growth.

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 Forecasts Spreadsheet (Continued)

Other noncurrent liabilities (2) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
common size 0.0% 0.0% 0.0% 0% 0% 0% 0% 0%

22091_bm_appC_hr_C1-C40.indd 21
rate of change Explain assumptions.
Total Liabilities 4,334.0 4,557.0 5,305.0 5,515.5 5,592.8 5,675.7 5,760.2 5,838.5 6,013.7
  common size 85.7% 89.1% 85.4% 86.8% 87.8% 87.9% 88.0% 88.1% 88.1%
   rate of change 5.1% 16.4% 4.0% 1.4% 1.5% 1.5% 1.4%
SHAREHOLDERS’ EQUITY
Preferred stock 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0% 0% 0% 0% 0%
   rate of change Explain assumptions
Common stock 1 Additional paid in capital 1,134.0 1,205.0 1,296.0 1,461.6 1,465.0 1,484.6 1,505.2 1,523.5 1,569.2
  common size 22.4% 23.6% 20.9% 23.0% 23.0% 23.0% 23.0% 23.0%
   rate of change 6.3% 7.6% Assume no major issues; equity remains a constant proportion of total assets.
Retained earnings <deficit> 2,797.0 3,150.0 3,567.0 4,008.5 4,435.1 4,871.6 5,288.8 5,713.0 5,884.3
  common size 55.3% 61.6% 57.4%
APPENDIX C

   rate of change 12.6% 13.2% Add net income and subtract dividends; see forecast box below.
Accum. other comprehensive income
<loss> (547.0) (602.0) (640.0) (640.0) (640.0) (640.0) (640.0) (640.0) (659.2)
  common size (10.8%) (11.8%) (10.3%) 0.0 0.0 0.0 0.0 0.0
   rate of change 10.1% 6.3% Add accumulated other comprehensive income items from income statement
<Treasury stock> and other equity
adjustments (2,658.0) (3,194.0) (3,315.0) (3,990.7) (4,483.3) (4,937.1) (5,369.8) (5,811.1) (5,985.4)
  common size (52.5%) (62.4%) (53.4%) 0 0 0 0 0
   rate of change 20.2% 3.8% Treasury stock repurchases, financial flexible amount determined below.
Total Common Shareholders’ Equity 726.0 559.0 908.0 839.5 776.8 779.1 784.2 785.4 808.9
  common size 14.3% 10.9% 14.6% 13.2% 12.2% 12.1% 12.0% 11.9%
   rate of change (23.0%) 62.4% (7.5%) (7.5%) 0.3% 0.7% 0.1% 3.0%
Financial Statement Analysis Package (FSAP)

Noncontrolling interests 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
  common size 0.0% 0.0% 0.0% 0.0 0.0 0.0 0.0 0.0
   rate of change Explain assumptions.
Total Equity 726.0 559.0 908.0 839.5 776.8 779.1 784.2 785.4 808.9
  common size 14.3% 10.9% 14.6% 13.2% 12.2% 12.1% 12.0% 11.9%
   rate of change (23.0%) 62.4% (7.5%) (7.5%) 0.3% 0.7% 0.1%
Total Liabilities and Equities 5,060.0 5,116.0 6,213.0 6,354.9 6,369.6 6,454.8 6,544.4 6,623.9 6,822.6
  common size 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
   rate of change 1.1% 21.4% 2.3% 0.2% 1.3% 1.4% 1.2% 3.0%
C-21

Check figures: Balance Sheet A5L1OE? 0 0 0 0 0 0 0 0 0

(Continued)

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 Forecasts Spreadsheet (Continued) C-22

Initial adjustment needed to balance the balance sheet:

(675.7) (492.6) (453.8) (432.8) (441.3) (439.8)
Dividends forecasts:

22091_bm_appC_hr_C1-C40.indd 22
Common dividends: (662.3) (639.9) (654.7) (625.8) (636.2) (655.3)
(60.0%) (60.0%) (60.0%) (60.0%) (60.0%)
Assume dividend payout of net income, if any.
Preferred dividends: 0.0 0.0 0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0 0.0
Enter preferred stock dividend payment amounts, if any.
Total dividends: (662.3) (639.9) (654.7) (625.8) (636.2) (655.3)
APPENDIX C

Total dividend forecast amounts.

Flexible Financial Account: Treasury Stock Purchases:
Original Forecast Amounts:
Treasury Stock Purchases: 0.0 0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0 0.0
Enter treasury stock purchases, if any.
Implied adjustments: (675.7) (492.6) (453.8) (432.8) (441.3) (439.8)
Adjustment needed to balance the balance sheet, from above.
Total: (675.7) (492.6) (453.8) (432.8) (441.3) (439.8)
Total Treasury Stock Purchase Amounts
Financial Statement Analysis Package (FSAP)

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 Forecasts Spreadsheet (Continued)

FSAP OUTPUT: FINANCIAL STATEMENT FORECASTS

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Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
Historical Figures: Forecasts:
IMPLIED STATEMENT OF CASH FLOWS 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
Net Income 820.0 939.0 1,103.8 1,066.5 1,091.1 1,043.1 1,060.4 1,092.2 1
Add back depreciation expense (net) 89.0 74.0 193.0 208.5 224.5 241.0 257.9 100.5 2
Add back amortization expense (net) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3
<Increase> Decrease in receivables—net (31.0) (17.0) (94.3) (25.0) (26.1) (22.4) (23.2) (25.2) 4
<Increase> Decrease in inventories (6.0) 58.0 (92.8) (28.9) (19.6) (27.9) (17.7) (19.2) 5
<Increase> Decrease in prepaid expenses 23.0 4.0 (0.5) (0.5) (0.5) (0.5) (0.5) (1.5) 6
<Increase> Decrease in other current assets (1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 7
<Increase> Decrease in other current assets (2) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8
Increase <Decrease> in accounts payable 0.0 68.0 53.8 23.1 20.6 32.6 18.4 21.7 9
APPENDIX C

Increase <Decrease> in accrued liabilities 34.0 226.0 109.8 29.1 30.3 26.0 27.0 29.3 10
Increase <Decrease> in income taxes payable 9.0 16.0 4.8 (1.0) 0.7 (1.3) 0.5 0.9 11
Increase <Decrease> in other current liabilities (1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 12
Increase <Decrease> in other current liabilities (2) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 13
Net change in deferred tax liabilities (22.0) 12.0 12.0 (2.5) 1.7 (3.2) 1.2 2.1 14
Increase <Decrease> in long-term other liabilities 2.0 (13.0) 0.0 0.0 0.0 0.0 0.0 23.0 15
Increase <Decrease> in other noncurrent
liabilities (2) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 16
  Net Cash Flows from Operations 918.0 1,367.0 1,289.7 1,269.2 1,322.8 1,287.4 1,323.9 1,223.8 17
<Increase> Decrease in property, plant, & equip.
at cost (127.0) (143.0) (292.6) (278.6) (288.0) (296.1) (304.6) (143.6) 18
<Increase> Decrease in operating lease right-of-
Financial Statement Analysis Package (FSAP)

use assets 0.0 (291.0) (25.6) (24.4) (25.2) (25.9) (26.6) (12.6) 19
<Increase> Decrease in short-term investments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 20
<Increase> Decrease in long-term investments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 21
<Increase> Decrease in goodwill 11.0 14.0 0.0 0.0 0.0 0.0 0.0 (47.3) 22
<Increase> Decrease in trademarks and other
intangibles 17.0 18.0 13.0 12.0 12.0 11.0 10.0 (25.1) 23
<Increase> Decrease in other assets (52.0) (54.0) (16.4) (17.2) (18.1) (19.0) (19.9) (12.6) 24
<Increase> Decrease in other noncurrent
assets (2) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 25
  Net Cash Flows from Investing Activities (151.0) (456.0) (321.6) (308.2) (319.3) (330.0) (341.1) (241.1) 26
C-23

(Continued)

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 Forecasts Spreadsheet (Continued) C-24

Historical Figures: Forecasts:

IMPLIED STATEMENT OF CASH FLOWS 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
Increase <Decrease> in short-term debt 197.0 (396.0) 0.0 0.0 0.0 0.0 0.0 0.0 27

22091_bm_appC_hr_C1-C40.indd 24
Increase <Decrease> in long-term debt 3.0 493.0 0.0 0.0 0.0 0.0 0.0 83.4 28
Increase <Decrease> in operating lease
obligations 0.0 342.0 30.1 28.6 29.6 30.4 31.3 14.8 29
Increase <Decrease> in preferred stock 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 30
Increase <Decrease> in common stock 1 paid in
capital 71.0 91.0 165.6 3.4 19.6 20.6 18.3 45.7 31
Increase <Decrease> in accum. OCI (55.0) (38.0) 0.0 0.0 0.0 0.0 0.0 (19.2) 32
Increase <Decrease> in treasury stock and other
APPENDIX C

equity adjs. (536.0) (121.0) (675.7) (492.6) (453.8) (432.8) (441.3) (174.3) 33
Dividends paid (467.0) (522.0) (662.3) (639.9) (654.7) (625.8) (636.2) (920.8) 34
Increase <Decrease> in noncontrolling interests 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 35
  Net Cash Flows from Financing Activities (787.0) (151.0) (1,142.3) (1,100.4) (1,059.2) (1,007.5) (1,028.0) (970.5) 36
  Net Change in Cash (20.0) 760.0 (174.2) (139.4) (55.7) (50.2) (45.2) 12.2 37
Check Figure:
Net change in cash – Change in cash balance 0 0 0 0 0 0 0 0
Financial Statement Analysis Package (FSAP)

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 Forecasts Spreadsheet (Continued)

FSAP OUTPUT: FINANCIAL STATEMENT FORECASTS

22091_bm_appC_hr_C1-C40.indd 25
Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
Historical Figures: Forecasts:
2018 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
GROWTH
Revenue Growth Rates: 2.5% 1.5% 8.2% 14.6% 3.4% 3.4% 2.8% 2.8% 3.0%
Net Income Growth Rates: 17.4% (0.4%) 14.5% 17.6% (3.4%) 2.3% (4.4%) 1.7% 3.0%
Total Asset Growth Rates 10.6% 1.1% 21.4% 2.3% 0.2% 1.3% 1.4% 1.2% 3.0%
RETURN ON ASSETS (based on reported amounts):
Profit Margin for ROA 14.5% 14.4% 15.2% 15.3% 14.4% 14.2% 13.2% 13.1% 13.1%
3 Asset Turnover 1.3 1.2 1.2 1.2 1.3 1.3 1.3 1.3 1.3
5 Return on Assets 18.5% 17.6% 18.1% 18.8% 18.0% 18.2% 17.2% 17.3% 17.4%
RETURN ON ASSETS (excluding the effects of nonrecurring items):
APPENDIX C

   Profit Margin for ROA 14.5% 14.4% 15.2% 15.3% 14.4% 14.2% 13.2% 13.1% 13.1%
3 Asset Turnover 1.3 1.2 1.2 1.2 1.3 1.3 1.3 1.3 1.3
5 Return on Assets 18.5% 17.6% 18.1% 18.8% 18.0% 18.2% 17.2% 17.3% 17.4%
RETURN ON COMMON EQUITY (based on reported amounts):
   Profit Margin for ROCE 13.4% 13.2% 14.0% 14.3% 13.4% 13.3% 12.3% 12.2% 12.2%
3 Asset Turnover 1.3 1.2 1.2 1.2 1.3 1.3 1.3 1.3 1.3
3 Capital Structure Leverage 7.6 7.9 7.7 7.2 7.9 8.2 8.3 8.4 8.4
5 Return on Common Equity 129.8% 127.6% 128.0% 126.3% 132.0% 140.3% 133.4% 135.1% 137.0%
RETURN ON COMMON EQUITY (excluding the effects of nonrecurring items):
   Profit Margin for ROCE 13.4% 13.2% 14.0% 14.3% 13.4% 13.3% 12.3% 12.2% 12.2%
3 Asset Turnover 1.3 1.2 1.2 1.2 1.3 1.3 1.3 1.3 1.3
3 Capital Structure Leverage 7.6 7.9 7.7 7.2 7.9 8.2 8.3 8.4 8.4
Financial Statement Analysis Package (FSAP)

5 Return on Common Equity 129.8% 127.6% 128.0% 126.3% 132.0% 140.3% 133.4% 135.1% 137.0%

(Continued)
C-25

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 Forecasts Spreadsheet (Continued) C-26

Historical Figures: Forecasts:

2018 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
OPERATING PERFORMANCE:
Gross Profit / Revenues 43.7% 43.9% 45.6% 46.0% 45.0% 45.0% 44.0% 44.0% 44.0%

22091_bm_appC_hr_C1-C40.indd 26
Operating Profit Before Taxes / Revenues 18.5% 18.1% 19.1% 19.3% 18.1% 17.9% 16.7% 16.5% 16.5%
ASSET TURNOVER:
Revenues / Avg. Accounts Receivable 10.5 10.1 10.5 11.1 10.5 10.5 10.5 10.5 10.5
COGS / Average Inventory 7.1 6.8 7.6 8.3 7.8 7.7 7.8 7.7 7.7
Revenues / Average Fixed Assets 6.4 6.1 6.3 6.7 6.4 6.3 6.2 6.2 6.1
LIQUIDITY:
Current Ratio 1.1 0.9 1.4 1.1 0.9 1.1 0.9 1.1 1.1
APPENDIX C

Quick Ratio 0.6 0.5 1.1 0.8 0.6 0.8 0.6 0.7 0.7
SOLVENCY:
Total Liabilities / Total Assets 85.7% 89.1% 85.4% 86.8% 87.8% 87.9% 88.0% 88.1% 88.1%
Total Liabilities / Total Equity 597.0% 815.2% 584.3% 657.0% 719.9% 728.5% 734.5% 743.4% 743.4%
Interest Coverage Ratio 13.4 11.6 13.0 17.0 16.4 16.8 16.1 16.3 16.3
Financial Statement Analysis Package (FSAP)

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 Forecast Development Spreadsheet
Analyst Name: Wahlen, Baginski, and Bradshaw

22091_bm_appC_hr_C1-C40.indd 27
Company Name: Clorox
Sales Forecast Development
Historical Figures: Sales Forecasts:
Year 2018 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15
Net Sales (in millions): $ 6,124.0 $ 6,214.0 $ 6,721.0 $ 7,699.5 $ 7,959.0 $ 8,229.6 $ 8,461.4 $ 8,701.7
rates of change 1.5% 8.2% 14.6% 3.4% 3.4% 2.8% 2.8%
Implied revenue growth rates.
Sales Forecasts by Segments (from projections below):
Health and Wellness $ 2,223.0 $ 2,422.0 $ 2,749.0 $ 3,364.8 $ 3,533.0 $ 3,709.7 $ 3,856.2 $ 4,008.5
Household 1,849.0 1,774.0 1,795.0 1,938.6 1,967.7 1,997.2 2,027.2 2,057.6
Lifestyle 1,024.0 1,048.0 1,154.0 1,282.1 1,333.4 1,386.7 1,442.2 1,499.9
International 1,028.0 970.0 1,023.0 1,114.0 1,125.0 1,136.0 1,135.9 1,135.8
APPENDIX C

Total Net Sales $ 6,124.0 $ 6,214.0 $ 6,721.0 $ 7,699.5 $ 7,959.0 $ 8,229.6 $ 8,461.4 $ 8,701.7
rates of change 1.5% 8.2% 14.6% 3.4% 3.4% 2.8% 2.8%
Implied revenue growth rates.

(Continued)
Financial Statement Analysis Package (FSAP)
C-27

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 Forecast Development Spreadsheet (Continued) C-28

Sales by Segment: Sales Forecasts by Segment:

2018 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15

22091_bm_appC_hr_C1-C40.indd 28
Health and Wellness $ 2,223.0 $ 2,422.0 $ 2,749.0 $ 3,364.8 $ 3,533.0 $ 3,709.7 $ 3,856.2 $ 4,008.5
Sales growth rates: 9.0% 13.5% 22.4% 5.0% 5.0% 4.0% 4.0%
Volume growth: 7.0% 15.0% 20.0% 5.0% 5.0% 5.0% 5.0%
Price changes: 1.8% (1.3%) 2.0% 0.0% 0.0% (1.0%) (1.0%)
Five-year growth rate history: 2016 2017 2018 2019 2020 CAGR
Sales growth rates: 5.0% 5.0% 3.0% 9.0% 13.5% 7.0%
Volume growth: 6.0% 10.0% 3.0% 7.0% 15.0% 8.1%
Price changes: (0.9%) (4.5%) 0.0% 1.8% (1.3%) (1.0%)
APPENDIX C

Household $ 1,849.0 $ 1,774.0 $ 1,795.0 $ 1,938.6 $ 1,967.7 $ 1,997.2 $ 2,027.2 $ 2,057.6

Sales growth rates: (4.1%) 1.2% 8.0% 1.5% 1.5% 1.5% 1.5%
Volume growth: (7.0%) 3.0% 8.0% 1.5% 1.5% 1.5% 1.5%
Price changes: 3.2% (1.8%) 0.0% 0.0% 0.0% 0.0% 0.0%
Five-year growth rate history: 2016 2017 2018 2019 2020 CAGR
Sales growth rates: 4.0% 5.0% 0.0% (4.1%) 1.2% 1.2%
Volume growth: 3.0% 8.0% 2.0% (7.0%) 3.0% 1.7%
Price changes: 1.0% (2.8%) (2.0%) 3.2% (1.8%) (0.5%)
Lifestyle $ 1,024.0 $ 1,048.0 $ 1,154.0 $ 1,282.1 $ 1,333.4 $ 1,386.7 $ 1,442.2 $ 1,499.9
Sales growth rates: 2.3% 10.1% 11.1% 4.0% 4.0% 4.0% 4.0%
Volume growth: 3.0% 9.0% 10.0% 4.0% 4.0% 4.0% 4.0%
Price changes: (0.6%) 1.0% 1.0% 0.0% 0.0% 0.0% 0.0%
Five-year growth rate history: 2016 2017 2018 2019 2020 CAGR
Financial Statement Analysis Package (FSAP)

Sales growth rates: 4.0% 1.0% 8.0% 2.3% 10.1% 5.0%

Volume growth: 5.0% 1.0% 8.0% 3.0% 9.0% 5.2%
Price changes: (1.0%) 0.0% 0.0% (0.6%) 1.0% (0.1%)
International $1,028.0 $ 970.0 $1,023.0 $1,114.0 $1,125.0 $1,136.0 $1,135.9 $1,135.8
Sales growth rates: (5.6%) 5.5% 8.9% 1.0% 1.0% 0.0% 0.0%
Volume growth: 2.0% 9.0% 10.0% 2.0% 2.0% 1.0% 1.0%
Price changes and foreign
currency exchange rates: (7.5%) (3.2%) (1.0%) (1.0%) (1.0%) (1.0%) (1.0%)
Five-year growth rate history: 2016 2017 2018 2019 2020 CAGR
Sales growth rates: (8.0%) 1.0% 2.0% (5.6%) 5.5% (1.2%)
Volume growth: 1.0% 1.0% 0.0% 2.0% 9.0% 2.5%
Price changes and foreign
currency exchange rates: (8.9%) 0.0% 2.0% (7.5%) (3.2%) (3.6%)
Total Sales $ 6,124.0 $6,214.0 $6,721.0 $ 7,699.5 $ 7,959.0 $8,229.6 $ 8,461.4 $ 8,701.7
1.5% 8.2% 14.6% 3.4% 3.4% 2.8% 2.8%

12/15/21 8:31 PM
 Forecast Development Spreadsheet (Continued)

Forecast Development: Capital Expenditures, Property, Plant and Equipment, and Depreciation

22091_bm_appC_hr_C1-C40.indd 29
Capital Expenditures: CAPEX Forecasts:
2018 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15
CAPEX:
PP&E Acquired $ 194.0 $ 206.0 $254.0
PP&E Sold 0 0 0
Net CAPEX $ 194.0 $ 206.0 $ 254.0 $ 292.6 $ 278.6 $ 288.0 $ 296.1 $ 304.6
Net CAPEX as a percent of:
Gross PP&E 6.6% 6.7% 8.0% 8.8% 7.7% 7.4% 7.1% 6.8%
Revenues 3.2% 3.3% 3.8% 3.8% 3.5% 3.5% 3.5% 3.5%
Property, Plant, and Equipment and Depreciation Property, Plant, and Equipment and Depreciation Forecasts:
PP&E at cost: 2018 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15
APPENDIX C

Beg. balance at cost: $ 3,327.0 $ 3,619.6 $ 3,898.1 $ 4,186.2 $ 4,482.3

Add: CAPEX forecasts from
above: 292.6 278.6 288.0 296.1 304.6
End balance at cost: $3,057.0 $ 3,184.0 $ 3,327.0 $ 3,619.6 $ 3,898.1 $ 4,186.2 $ 4,482.3 $ 4,786.9
Accumulated Depreciation:
Beg. Balance: $ (2,224.0) $ (2,417.0) $ (2,625.5) $ (2,850.1) $( 3,091.0)
Subtract: Depreciation
expense forecasts from
below: (193.0) (208.5) (224.5) (241.0) (257.9)
End Balance: $(2,061.0) $(2,150.0) $(2,224.0) $(2,417.0) $(2,625.5) $(2,850.1) $(3,091.0) $(3,348.9)
PP&E—net $      996.0 $   1,034.0 $   1,103.0 $   1,202.5 $   1,272.6 $   1,336.1 $   1,391.3 $   1,438.0
Financial Statement Analysis Package (FSAP)

(Continued)
C-29

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 Forecast Development Spreadsheet (Continued) C-30

Depreciation Expense Forecast Development: Depreciation expense forecast on existing PP&E:

Existing PP&E at cost, less any non-depreciable PP&E (i.e., land): $3,182.0 $176.8 $176.8 $176.8 $176.8 $176.8
Remaining balance to be depreciated. $1,103.0 $926.2 $749.4 $572.7 $395.9 $219.1

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New PP&E to be Depreciated: Depreciation expense forecasts on new PP&E:
Capex Year 11 $292.6 $   6.3 $   16.3 $   16.3 $   16.3 $   16.3
Capex Year 12 $278.6 $   15.5 $   15.5 $   15.5 $   15.5
Capex Year 13 $288.0 $   16.0 $   16.0 $   16.0
Capex Year 14 $296.1 $   16.5 $   16.5
Capex Year 15 $304.6 $   16.9
Total Depreciation Expense $193.0 $208.5 $224.5 $241.0 $257.9
APPENDIX C

Depreciation methods: 2018 2019 2020

PP&E at Cost $3,057.0 $3,184.0 $3,327.0
Subtract any PP&E that is not
Depreciable (208.0) (269.0) (298.0)
Depreciable PP&E $2,849.0 $2,915.0 $3,029.0
Avg Depreciable PP&E $2,882.0 $2,972.0
Depreciation Expense $ 156.0 $ 165.0 $ 166.0
Implied Average Useful Life in
Years 17.5 17.9
Useful Life Forecast Assumption: (in years) 18.0
Financial Statement Analysis Package (FSAP)

12/15/21 8:31 PM
 Forecast Development Spreadsheet (Continued)

Long-Term Debt and Weighted-Average Interest Rates

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Weighted
Debt Issues Face Value Proportion of Stated Interest Average
and Maturities: Amounts Total Rates Interest Rates
Due November 2021 $ 299.0 0.108 3.800% 0.4087%
Due September 2022 $ 599.0 0.215 3.050% 0.6572%
Due December 2024 $ 498.0 0.179 3.500% 0.6270%
Due October 2027 $ 397.0 0.143 3.100% 0.4427%
Due May 2028 $ 496.0 0.178 3.900% 0.6958%
Due May 2030 $ 491.0 0.177 1.800% 0.3179%
Current Maturities $ — 0.000 0.000% 0.0000%
Totals $2,780.0 1.000 3.1493%
Weighted Average Interest Rate Used in Forecasts: 3.1493%
APPENDIX C

Cost of Products Sold Cost of Products Sold Projections

2018 2019 2020 Year 11 Year 12 Year 13 Year 14 Year 15
Cost of Products Sold: $3,449.0 $3,486.0 $3,658.0 $4,157.7 $4,377.5 $4,526.3 $4,738.4 $4,873.0
as a percent of total revenues 56.3% 56.1% 54.4% 54.0% 55.0% 55.0% 56.0% 56.0%
Assume cost savings in Year11 due to economies of scale arising from the Year 11 surge in sales.
In Year 12 and Year 13, assume Clorox will be able to maintain a lower cost of products sold percentage.
In Year 14 and Year 15, assume that Clorox’s cost of products sold will revert to the historical average.

(Continued)
Financial Statement Analysis Package (FSAP)
C-31

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 C-32 APPENDIX C Financial Statement Analysis Package (FSAP)

Valuation Spreadsheet

DATA CHECKS - Estimated Value per Share

Dividend Based Valuation $205.65
Free Cash Flow Valuation $205.65
Residual Income Valuation $205.65
Residual Income Market-to-Book Valuation $205.65
Free Cash Flow for All Debt and Equity Valuation $205.08
Check: All Estimated Value per Share amounts should be the same, with the possible exception of the share value from the Free Cash Flow for All Debt and
Equity model. See additional comments in cell J266.

FSAP OUTPUT: VALUATION MODELS

Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
VALUATION PARAMETER ASSUMPTIONS
Current share price $217.19
Number of shares outstanding (millions) 126.2 COST OF PREFERRED STOCK
Current market value $27,409 Preferred stock capital $—
Long-run growth assumption used in
forecasts 3.0% Preferred dividends $—
Long-run growth assumption used in
valuation. 3.0% Implied yield 0.0%
(Both long-run growth assumptions COST OF NONCONTROLLING
should be the same.) INTERESTS’ CAPITAL
COST OF EQUITY CAPITAL: Noncontrolling interests capital $—
Equity risk factor (market beta) 0.75 Earnings attributable to noncontrolling interests $—
Risk free rate 3.00% Implied yield 0.0%
Market risk premium 5.0% WEIGHTED AVERAGE COST OF CAPITAL
Required rate of return on common
equity: 6.75% Weight of equity in capital structure 0.8898
COST OF DEBT CAPITAL Weight of debt in capital structure 0.0991
Debt capital $3,051 Weight of lease obligations in capital structure 0.0111
Cost of debt capital, before tax 3.15% Weight of preferred stock in capital structure 0.0000
Weight of noncontrolling interests in capital
Effective tax rate (21.0%) structure 0.0000
After-tax cost of debt capital 2.49% Weighted average cost of capital 6.27%
COST OF LEASE OBLIGATIONS
Capitalized lease obligations $342
Implied interest rate on leases, before tax 2.49%
Effective tax rate (21.0%)
After-tax cost of debt capital 1.97%

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 APPENDIX C Financial Statement Analysis Package (FSAP) C-33

Valuation Spreadsheet (Continued)

FSAP OUTPUT: VALUATION MODELS

Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
Continuing
1 2 3 4 5 Value
Dividends-Based Valuation Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
Dividends Paid to Common Shareholders 662.3 639.9 654.7 625.8 636.2
Less: Common Stock Issues (165.6) (3.4) (19.6) (20.6) (18.3)
Plus: Common Stock Repurchases 675.7 492.6 453.8 432.8 441.3
Dividends to Common Equity 1,172.4 1,129.1 1,088.8 1,038.0 1,059.3 1,068.7
Present Value Factors 0.937 0.878 0.822 0.770 0.721
Present Value Net Dividends 1,098.2 990.8 895.1 799.3 764.1
Sum of Present Value Net Dividends 4,547.6
Present Value of Continuing Value 20,557.5
Total 25,105.1
Adjust to midyear discounting 1.0338
Total Present Value Dividends 25,952.4
Shares Outstanding 126.2
Estimated Value per Share $205.65
Current share price $217.19
Percent difference (5%)

(Continued)

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 C-34 APPENDIX C Financial Statement Analysis Package (FSAP)

Valuation Spreadsheet (Continued)

FSAP OUTPUT: VALUATION MODELS

Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
Continuing
1 2 3 4 5 Value
Free Cash Flows for
Common Equity Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
Net Cash Flow from Operations 1,289.7 1,269.2 1,322.8 1,287.4 1,323.9 1,223.8
Decrease (Increase) in Cash Required for
Operations 174.2 139.4 55.7 50.2 45.2 (12.2)
Net Cash Flow from Investing (321.6) (308.2) (319.3) (330.0) (341.1) (241.1)
Net CFs from Debt Financing 30.1 28.6 29.6 30.4 31.3 98.2
Net CFs into Financial Assets 0.0 0.0 0.0 0.0 0.0 0.0
Net CFs – Pref. Stock and Noncontrolling Interests 0.0 0.0 0.0 0.0 0.0 0.0
Free Cash Flow for Common
Equity 1,172.4 1,129.1 1,088.8 1,038.0 1,059.3 1,068.7
Present Value Factors 0.937 0.878 0.822 0.770 0.721
Present Value Free Cash Flows 1,098.2 990.8 895.1 799.3 764.1
Sum of Present Value Free Cash Flows 4,547.6
Present Value of Continuing Value 20,557.5
Total 25,105.1
Adjust to midyear discounting 1.034
Total Present Value Free Cash
Flows to Equity 25,952.4
Shares Outstanding 126.2
Estimated Value per Share $205.65
Current share price $217.19
Percent difference (5%)

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 APPENDIX C Financial Statement Analysis Package (FSAP) C-35

Valuation Spreadsheet (Continued)

FSAP OUTPUT: VALUATION MODELS

Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
Dividends Valuation Sensitivity Analysis:
Vary Long-Run Growth Assumptions:
205.65 0.0% 1.0% 2.0% 2.5% 3.0% 3.5% 4.0% 5.0%
Vary Discount 5.25% 165.67 196.00 244.99 282.86 337.54 423.48 578.17 2743.83
Rates: 5.50% 158.39 185.46 228.00 259.91 304.58 371.58 483.25 1376.63
5.75% 151.74 176.03 213.27 240.49 277.60 331.21 415.45 920.88
6.00% 145.65 167.54 200.39 223.84 255.12 298.91 364.59 692.99
6.25% 140.05 159.87 189.01 209.41 236.09 272.48 325.03 556.25
6.50% 134.87 152.88 178.90 196.79 219.78 250.45 293.37 465.08
6.75% 130.08 146.51 169.85 185.65 205.65 231.81 267.47 399.96
7.00% 125.63 140.67 161.71 175.74 193.28 215.82 245.89 351.11
7.25% 121.49 135.29 154.34 166.88 182.36 201.97 227.62 313.11
7.50% 117.63 130.33 147.64 158.90 172.65 189.85 211.96 282.71
7.75% 114.01 125.73 141.52 151.68 163.97 179.15 198.39 257.83
8.00% 110.62 121.46 135.91 145.11 156.15 169.64 186.51 237.10
8.50% 104.44 113.78 125.99 133.62 142.64 153.47 166.70 204.51
9.00% 98.94 107.05 117.48 123.90 131.38 140.23 150.85 180.05

(Continued)

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 C-36 APPENDIX C Financial Statement Analysis Package (FSAP)

Valuation Spreadsheet (Continued)

FSAP OUTPUT: VALUATION MODELS

Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
Continuing
1 2 3 4 5 Value
RESIDUAL INCOME VALUATION Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
Comprehensive Income Available for Common
Shareholders 1,103.8 1,066.5 1,091.1 1,043.1 1,060.4 1,092.2
Lagged Book Value of Common Shareholders’
Equity (at t-1) 908.0 839.5 776.8 779.1 784.2 785.4
Required Earnings 61.3 56.7 52.4 52.6 52.9 53.0
Residual Income 1,042.5 1,009.8 1,038.7 990.5 1,007.5 1,039.2
Present Value Factors 0.937 0.878 0.822 0.770 0.721
Present Value Residual Income 976.6 886.1 853.8 762.7 726.8
Sum of Present Value Residual Income 4,206.1
Present Value of Continuing Value 19,991.0
Total 24,197.1
Add: Beginning Book Value of Equity 908.0
Present Value of Equity 25,105.1
Adjust to midyear discounting 1.0338
Total Present Value of Equity 25,952.4
Shares Outstanding 126.2
Estimated Value per Share $205.65
Current share price $217.19
Percent difference (5%)

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 APPENDIX C Financial Statement Analysis Package (FSAP) C-37

Valuation Spreadsheet (Continued)

FSAP OUTPUT: VALUATION MODELS

Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
Residual Income Valuation Sensitivity Analysis:
Long-Run Growth Assumptions
205.65 0.0% 1.0% 2.0% 2.5% 3.0% 3.5% 4.0% 5.0%
Discount 5.00% 173.67 207.85 264.82 310.39 378.75 492.68 720.54 #DIV/0!
Rates: 5.50% 158.39 185.46 228.00 259.91 304.58 371.58 483.25 1376.63
5.75% 151.74 176.03 213.27 240.49 277.60 331.21 415.45 920.88
6.00% 145.65 167.54 200.39 223.84 255.12 298.91 364.59 692.99
6.25% 140.05 159.87 189.01 209.41 236.09 272.48 325.03 556.25
6.50% 134.87 152.88 178.90 196.79 219.78 250.45 293.37 465.08
6.75% 130.08 146.51 169.85 185.65 205.65 231.81 267.47 399.96
7.00% 125.63 140.67 161.71 175.74 193.28 215.82 245.89 351.11
7.25% 121.49 135.29 154.34 166.88 182.36 201.97 227.62 313.11
7.50% 117.63 130.33 147.64 158.90 172.65 189.85 211.96 282.71
8.00% 110.62 121.46 135.91 145.11 156.15 169.64 186.51 237.10
8.50% 104.44 113.78 125.99 133.62 142.64 153.47 166.70 204.51
9.00% 98.94 107.05 117.48 123.90 131.38 140.23 150.85 180.05
10.00% 89.59 95.84 103.64 108.33 113.68 119.86 127.06 145.80

(Continued)

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 C-38 APPENDIX C Financial Statement Analysis Package (FSAP)

Valuation Spreadsheet (Continued)

FSAP OUTPUT: VALUATION MODELS

Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
Continuing
RESIDUAL INCOME VALUATION 1 2 3 4 5 Value
Market-to-Book Approach Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
Comprehensive Income Available for
Common Shareholders 1,103.8 1,066.5 1,091.1 1,043.1 1,060.4 1,092.2
Book Value of Common Shareholders’
Equity (at t–1) 908.0 839.5 776.8 779.1 784.2 785.4
Implied ROCE 121.57% 127.04% 140.46% 133.88% 135.22% 139.07%
Residual ROCE 114.82% 120.29% 133.71% 127.13% 128.47% 132.32%
Cumulative growth factor in common equity
as of t–1 100.00% 92.45% 85.55% 85.81% 86.37% 86.49%
Residual ROCE times cumulative growth 114.82% 111.21% 114.39% 109.08% 110.96% 114.45%
Present Value Factors 0.937 0.878 0.822 0.770 0.721
Present Value Residual ROCE times growth 1.076 0.976 0.940 0.840 0.800
Sum of Present Value Residual ROCE times
growth 4.63
Present Value of Continuing Value 22.02
Total Present Value Residual ROCE 26.65
Add one for book value of equity at t-1 1.0
Sum 27.65
Adjust to mid-year discounting 1.03375
Implied Market-to-Book Ratio 28.582
Times Beginning Book Value of Equity 908.0
Total Present Value of Equity 25,952.4
Shares Outstanding 126.2
Estimated Value per Share $205.65
Current share price $217.19
Percent difference (5%)

Sensitivity analysis for the market-to-book approach should be identical to that of the residual income approach.

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 APPENDIX C Financial Statement Analysis Package (FSAP) C-39

Valuation Spreadsheet (Continued)

FSAP OUTPUT: VALUATION MODELS

Analyst Name: Wahlen, Baginski, and Bradshaw
Company Name: Clorox
Continuing
1 2 3 4 5 Value
Free Cash Flows for
All Debt and Equity Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
Net Cash Flow from Operations 1,289.7 1,269.2 1,322.8 1,287.4 1,323.9 1,223.8
Add back: Interest Expense after tax 76.2 76.8 77.3 77.9 78.5 80.9
Subtract: Interest Income after tax 0.0 0.0 0.0 0.0 0.0 0.0
Decrease (Increase) in Cash Required
for Operations 174.2 139.4 55.7 50.2 45.2 (12.2)
Free Cash Flow from Operations 1,540.1 1,485.4 1,455.9 1,415.5 1,447.6 1,292.5
Net Cash Flow from Investing (321.6) (308.2) (319.3) (330.0) (341.1) (241.1)
Add back: Net CFs into Financial Assets 0.0 0.0 0.0 0.0 0.0 0.0
Free Cash Flows – All Debt and Equity 1,218.5 1,177.2 1,136.6 1,085.5 1,106.5 1,051.4
Present Value Factors 0.941 0.885 0.833 0.784 0.738
Present Value Free Cash Flows 1,146.5 1,042.3 946.9 850.9 816.2
Sum of Present Value Free Cash Flows 4,802.9
Present Value of Continuing Value 23,683.2
Total Present Value Free Cash Flows to Equity
and Debt 28,486.1
Less: Value of Outstanding Debt (3,051.0)
Less: Value of Lease Obligations (342.0)
Less: Value of Preferred Stock 0.0
Plus: Value of Financial Assets 0.0
Present Value of Equity 25,093.1
Adjust to midyear discounting 1.0314
Total Present Value of Equity 25,880.4
Shares Outstanding 126.2
Estimated Value per Share $205.08
Current share price $217.19
Percent difference (6%)

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