Forecasting the Income Statement, Balance Sheet, and Statement of Cash Flows

Telstra Corporation Limited is an Australian telecommunicates ions and Media Company that builds and provides land-based and mobile telecom services along with internet and pay television products. The company is Australia’s largest 3G and 4G enabled mobile network covering 99.3 percent of the Australian population. Following are the financial statements for the 2012 year end, reported in Australian dollars.

Required

Forecast Telstra’s fiscal year 20 13 income statement, balance sheet, and statement of cash flows. Round forecasts to the nearest whole dollar. Identify all financial statement relations estimated and assumptions made. Estimate forecasted income statement and balance sheet relations to one decimal place. Assume that revenue will increase by 3% in 2013. Calculate depreciation and amortisation expense as a percent of revenue. Assume no change for: other income, finance income and finance costs on the income statement. Assume no change for derivative financial assets, investments, current borrowings, derivative financial liabilities, share capital, reserves, and noncontrolling interests on the balance sheet. Assume that assets and liabilities classified as held for sale are eliminated in 20 13. For fiscal 20 13, capital expenditures are $4, 00 1 million, and dividends are $3,475 million. Use the noncurrent borrowings as your plug account to balance the balance sheet. What do the forecasts imply about Telstra's financing needs for the upcoming year?