1. Using the data in the student spreadsheet file Ethan Allen Financials.xlsx forecast the October 11, 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 $797.3359; (2) the tax rate will be 35%; (3) each item that changes with sales will be the five-year average percentage of sales; (4) net fixed assets will increase to $300; and (5) the common dividend will be $0.75 per share. Use your judgment on all other items. a. What is the discretionary financing needed in 2019? Is this a surplus or deficit? b. Assume that the DFN will be absorbed by long-term debt and that the interest rate is 4% of LTD. Set up an iterative worksheet to eliminate it. Ethan Allen Interiors Inc. Income Statement (Industrial) All figures in millions of U.S. Dollar, except per share items Jun '18 Jun '17 Jun '16 Sales 794.202 754.600 746.659 Cost of Goods Sold (COGS) incl. D&A 351.966 343.437 340.163 Gross Income 442.236 411.163 406.496 SG&A Expense 353.057 345.229 336.860 EBIT (Operating Income) 89.179 65.934 69.636 Interest Expense 1.618 5.957 7.540 Other Income - Net 0.395 1.206 0.306 Unusual Expense - Net 0.000 4.500 0.000 Pretax Income 87.956 56.683 62.402 Income Taxes 31.319 19.541 19.471 Net Income 56.637 37.142 42.931 Jun '15 729.083 330.734 398.349 337.912 60.437 8.778 -1.485 0.000 50.174 17.696 32.478 Jun '14 729.373 339.085 390.288 340.676 49.612 9.020 0.562 -0.085 41.239 -8.455 49.694 EPS (recurring) EPS (diluted) Diluted Shares Outstanding Total Shares Outstanding Dividends per Share Payout Ratio 2.00 2.00 28.32 27.75 0.62 31.00 1.38 1.27 29.18 28.41 0.50 39.37 1.47 1.47 29.28 28.93 0.40 27.21 1.11 1.11 29.24 28.91 0.36 32.43 1.71 1.71 29.11 28.84 0.30 17.54 EBITDA EBIT Depreciation & Amortization Expense 108.53 89.18 19.35 85.08 65.93 19.14 87.57 69.64 17.93 78.45 60.44 18.01 68.19 49.61 18.58 1. Using the data in the student spreadsheet file Ethan Allen Financials.xlsx forecast the October 11, 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 $797.3359; (2) the tax rate will be 35%; (3) each item that changes with sales will be the five-year average percentage of sales; (4) net fixed assets will increase to $300; and (5) the common dividend will be $0.75 per share. Use your judgment on all other items. a. What is the discretionary financing needed in 2019? Is this a surplus or deficit? b. Assume that the DFN will be absorbed by long-term debt and that the interest rate is 4% of LTD. Set up an iterative worksheet to eliminate it. Ethan Allen Interiors Inc. Income Statement (Industrial) All figures in millions of U.S. Dollar, except per share items Jun '18 Jun '17 Jun '16 Sales 794.202 754.600 746.659 Cost of Goods Sold (COGS) incl. D&A 351.966 343.437 340.163 Gross Income 442.236 411.163 406.496 SG&A Expense 353.057 345.229 336.860 EBIT (Operating Income) 89.179 65.934 69.636 Interest Expense 1.618 5.957 7.540 Other Income - Net 0.395 1.206 0.306 Unusual Expense - Net 0.000 4.500 0.000 Pretax Income 87.956 56.683 62.402 Income Taxes 31.319 19.541 19.471 Net Income 56.637 37.142 42.931 Jun '15 729.083 330.734 398.349 337.912 60.437 8.778 -1.485 0.000 50.174 17.696 32.478 Jun '14 729.373 339.085 390.288 340.676 49.612 9.020 0.562 -0.085 41.239 -8.455 49.694 EPS (recurring) EPS (diluted) Diluted Shares Outstanding Total Shares Outstanding Dividends per Share Payout Ratio 2.00 2.00 28.32 27.75 0.62 31.00 1.38 1.27 29.18 28.41 0.50 39.37 1.47 1.47 29.28 28.93 0.40 27.21 1.11 1.11 29.24 28.91 0.36 32.43 1.71 1.71 29.11 28.84 0.30 17.54 EBITDA EBIT Depreciation & Amortization Expense 108.53 89.18 19.35 85.08 65.93 19.14 87.57 69.64 17.93 78.45 60.44 18.01 68.19 49.61 18.58