a. What is the discretionary financing needed in 2017? Is this a surplus 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. C. Create a chart of cash versus sales and add a trend line. Is cash 3 consistent percentage of sales? Does this fit your expectations? 1. Using the data in the student spreadsheet file Ethan Allen Financials.xlsx (to find the student spreadsheets for Financial Analysis with Microsoft Excel , eighth edition, go to www.cengagebrain.com) forecast the June 30, 2017 income statement and balance sheet for Ethan Allen. Use the percent of sales method and the folloxxing assumptions: (1) sales in FY 2017 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. or deficit? a. Av Pasta BIU G H 4 815 Xfx 55.59 B D F E Ethan Allen Interiors Inc. 1 Balance Sheet (Industrial) 2 3 All figures in millions of U.S. Dollar, except per share items Jun '16 Jun '15 Jun '14 Jun '13 Jun '12 5 Assets 6 Cash Only 52.659 76.182 109.176 72.601 79.721 0.000 7 Total Short Term Investments 9.005 2.198 18.153 15.529 8 Short-Term Receivables 9.467 12.547 12.426 12.277 14.919 9 Inventories 162.323 151.916 146.275 137.256 155.739 10 Other Current Assets 23.755 27.831 19.599 22.907 23.408 11 Total Current Assets 248.204 270.674 305.629 260.570 282.792 12 Property, Plant & Equipment - Gross 598.264 594.912 601.709 594.385 587.368 13 Accumulated Depreciation 324.649 317.877 313.553 302.713 291.673 14 Net Property, Plant & Equipment 273.615 277.035 288.156 291.672 295.695 1s Other Long-Term Assets 55.5901 59.599 60.649 65.043 66.301 16 Total Assets 577.409 607.308 654.434 617.285 644.788 17 I Liabilities & Shareholders' Equity 19 ST Debt & Curr. Portion LT Debt 3.001 3.341 0.501 0,480 0.250 20 Accounts Payable 15.437 18.946 24.320 22.995 27.315 21 Other Current Liabilities 104.909 118.682 111.226 109.464 123.512 22 Total Current Liabilities 123.347 140.969 136.047 132.939 151.077 2) Long-Term Debt 38.837 74.227 130.411 130.809 154.250 24 Other Liabilities 23.023 21.577 20.509 19.180 17.593 25 Total Liabilities 185.207 236.773 286.967 282.928 322.920 26 Common Stock Par/Carry Value 0.489 0.489 0.486 0.486 22 Additional Paid-in Capital/Capital Surplus 0.485 374.972 370.914 365.733 363.938 361.165 28 Retained Earnings 646.315 607.079 584.395 553.083 542.918 29 Treasury Stock and Other Deductions from E 629.574 607.947 583.147 583.150 582.700 30 Total Shareholders' Equity 392.202 370.535 367.467 334.357 321.868 31 Total Liabilities & Shareholders' Equity 577.409 607.308 654.434 617.285 644.788 32 Source : FactSet Fundamentals 33 ETH Income Statement ETH Balance Sheet Paste A x V G E A11 fx Other Income - Net B D 1 Ethan Allen Interiors Inc. 2 Income Statement (Industrial) 3 All figures in millions of U.S. Dollar, except per share items Jun '16 Jun '15 Jun 14 794.202 5 Sales 754.600 746.659 351.966 6 Cost of Goods Sold (COGS) incl. D&A 343.437 340.163 7 Gross Income 442.236 411.163 406.496 * SG&A Expense 353.057 345,229 336.860 9 EBIT (Operating Income) 89.179 65.934 69.636 10 Interest Expense 1.618 5.957 7.540 11 Other Income - Net 0.395 1.206 0.306 12 Unusual Expense - Net 0.000 4.500 0.000 13 Pretax Income 87.956 56.683 62.402 14 Income Taxes 31.319 19 541 19.471 15 Net Income 56.637 37.142 42.931 16 17 18 EPS (recurring) 2.00 1.38 1.47 19 EPS (diluted) 2.00 1.27 1.47 20 Diluted Shares Outstanding 28.32 29.18 29.28 21 Total Shares Outstanding 27.75 28.41 28,93 22 Dividends per Share 0.62 0.40 23 Payout Ratio 31.00 39 37 27.21 Jun '13 729.083 330.734 398.349 337.912 60.437 8.778 -1.485 0.000 50.174 17.696 32.478 Jun '12 729.373 339.085 390.288 340.676 49.612 9.020 0.562 0.085 41.239 -8.455 49.694 1.11 1.11 29.24 28.91 0.36 32.43 1.71 1.71 29.11 28.84 0.30 17.54 0.50 15 EBITDA 26 EBIT 27 Depreciation & Amortization Expense 3 108.53 89.IR 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 30 Source : FactSet Fundamentals 31 34 35 ETHIncome Statement ETH Balance Sheet a. What is the discretionary financing needed in 2017? Is this a surplus 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. C. Create a chart of cash versus sales and add a trend line. Is cash 3 consistent percentage of sales? Does this fit your expectations? 1. Using the data in the student spreadsheet file Ethan Allen Financials.xlsx (to find the student spreadsheets for Financial Analysis with Microsoft Excel , eighth edition, go to www.cengagebrain.com) forecast the June 30, 2017 income statement and balance sheet for Ethan Allen. Use the percent of sales method and the folloxxing assumptions: (1) sales in FY 2017 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. or deficit? a. Av Pasta BIU G H 4 815 Xfx 55.59 B D F E Ethan Allen Interiors Inc. 1 Balance Sheet (Industrial) 2 3 All figures in millions of U.S. Dollar, except per share items Jun '16 Jun '15 Jun '14 Jun '13 Jun '12 5 Assets 6 Cash Only 52.659 76.182 109.176 72.601 79.721 0.000 7 Total Short Term Investments 9.005 2.198 18.153 15.529 8 Short-Term Receivables 9.467 12.547 12.426 12.277 14.919 9 Inventories 162.323 151.916 146.275 137.256 155.739 10 Other Current Assets 23.755 27.831 19.599 22.907 23.408 11 Total Current Assets 248.204 270.674 305.629 260.570 282.792 12 Property, Plant & Equipment - Gross 598.264 594.912 601.709 594.385 587.368 13 Accumulated Depreciation 324.649 317.877 313.553 302.713 291.673 14 Net Property, Plant & Equipment 273.615 277.035 288.156 291.672 295.695 1s Other Long-Term Assets 55.5901 59.599 60.649 65.043 66.301 16 Total Assets 577.409 607.308 654.434 617.285 644.788 17 I Liabilities & Shareholders' Equity 19 ST Debt & Curr. Portion LT Debt 3.001 3.341 0.501 0,480 0.250 20 Accounts Payable 15.437 18.946 24.320 22.995 27.315 21 Other Current Liabilities 104.909 118.682 111.226 109.464 123.512 22 Total Current Liabilities 123.347 140.969 136.047 132.939 151.077 2) Long-Term Debt 38.837 74.227 130.411 130.809 154.250 24 Other Liabilities 23.023 21.577 20.509 19.180 17.593 25 Total Liabilities 185.207 236.773 286.967 282.928 322.920 26 Common Stock Par/Carry Value 0.489 0.489 0.486 0.486 22 Additional Paid-in Capital/Capital Surplus 0.485 374.972 370.914 365.733 363.938 361.165 28 Retained Earnings 646.315 607.079 584.395 553.083 542.918 29 Treasury Stock and Other Deductions from E 629.574 607.947 583.147 583.150 582.700 30 Total Shareholders' Equity 392.202 370.535 367.467 334.357 321.868 31 Total Liabilities & Shareholders' Equity 577.409 607.308 654.434 617.285 644.788 32 Source : FactSet Fundamentals 33 ETH Income Statement ETH Balance Sheet Paste A x V G E A11 fx Other Income - Net B D 1 Ethan Allen Interiors Inc. 2 Income Statement (Industrial) 3 All figures in millions of U.S. Dollar, except per share items Jun '16 Jun '15 Jun 14 794.202 5 Sales 754.600 746.659 351.966 6 Cost of Goods Sold (COGS) incl. D&A 343.437 340.163 7 Gross Income 442.236 411.163 406.496 * SG&A Expense 353.057 345,229 336.860 9 EBIT (Operating Income) 89.179 65.934 69.636 10 Interest Expense 1.618 5.957 7.540 11 Other Income - Net 0.395 1.206 0.306 12 Unusual Expense - Net 0.000 4.500 0.000 13 Pretax Income 87.956 56.683 62.402 14 Income Taxes 31.319 19 541 19.471 15 Net Income 56.637 37.142 42.931 16 17 18 EPS (recurring) 2.00 1.38 1.47 19 EPS (diluted) 2.00 1.27 1.47 20 Diluted Shares Outstanding 28.32 29.18 29.28 21 Total Shares Outstanding 27.75 28.41 28,93 22 Dividends per Share 0.62 0.40 23 Payout Ratio 31.00 39 37 27.21 Jun '13 729.083 330.734 398.349 337.912 60.437 8.778 -1.485 0.000 50.174 17.696 32.478 Jun '12 729.373 339.085 390.288 340.676 49.612 9.020 0.562 0.085 41.239 -8.455 49.694 1.11 1.11 29.24 28.91 0.36 32.43 1.71 1.71 29.11 28.84 0.30 17.54 0.50 15 EBITDA 26 EBIT 27 Depreciation & Amortization Expense 3 108.53 89.IR 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 30 Source : FactSet Fundamentals 31 34 35 ETHIncome Statement ETH Balance Sheet