Use the same data as in Problem 1.

a. Recalculate the percentage of sales income statement, but this time use the Trend function to forecast other income and interest expense.

b. Recalculate the percentage of sales balance sheet, but this time use the Trend function to forecast Cash, Other Long-term Assets, and Other Liabilities.

c. Do these new values appear to be more realistic than the original values? Does this make sense for each of these items? Might other income statement or balance sheet items be forecasted in this way?

Data from Problem 1.

Using the data in the student spreadsheet file Ethan Allen Financials.xlsx (to find the student spreadsheets for Financial Analysis with Microsoft Excel, ninth edition, go to (www.cengage.com/finance/mayes/analysis/9e), forecast the June 30, 2019 income statement and balance sheet for Ethan Allen. Use the percent of sales method and the following assumptions: 

(1) Sales in FY 2019 will be $761.20;

(2) The tax rate will be 25%; 

(3) Each item that changes with sales will be the five-year average percentage of sales; 

(4) Property, Plant & Equipment - Gross will increase to $650; 

(5) The dividend will be $0.90 per share. Use your judgment on all other items.