For the Year Ended Dec. 31, 2017
	2018*	2017	2016
Sales		4,330,000	3,240,000
Cost of Goods Sold		3,005,089	2,466,000
Gross Profit		1,324,911	774,000
G&A Expenses		988,411	207,000
Other Expenses		115,000	371,000
Depreciation		86,429	20,000
EBIT		135,071	176,000
Interest Expense		73,833	54,000
Earnings Before Taxes		61,238	122,000
Taxes		24,495	48,800
Net Income		36,743	73,200
Notes:
Tax Rate	40%
Short-term Interest Rate	3%
Long-term Interest Rate	8%
2018 Sales Forecast	4,500,000
Sales Multiplier for Scenarios
DFN for Scenarios

Cristal Clear, Inc.
Balance Sheet
As of Dec. 31, 2017
Assets	2018*	2017	2016
Cash and Equivalents		46,000	50,000
Accounts Receivable		309,286	360,000
Inventory		772,714	704,571
Total Current Assets		1,128,000	1,114,571
Plant & Equipment		434,667	435,000
Accumulated Depreciation		146,000	59,571
Net Fixed Assets		288,667	375,429
Total Assets		1,416,667	1,490,000
Liabilities and Owners' Equity
Accounts Payable		158,000	131,000
Short-term Notes Payable		201,000	264,500
Other Current Liabilities		121,000	117,000
Total Current Liabilities		480,000	512,500
Long-term Debt		370,000	167,500
Total Liabilities		850,000	680,000
Common Stock		367,667	408,000
Retained Earnings		199,000	402,000
Total Shareholder's Equity		566,667	810,000
Total Liabilities and Owners' Equity		1,416,667	1,490,000
2018 Forecasted Dividend Per Share	$ 0.45
2018 Number of Shares Outstanding	100,000
2018 Forecasted Total Dividend Paid	$ 239,743
Discretionary Financing Needed
Accumulated DFN
Iteration	0

Do the Financial Forecast of Income Statement and Balance Sheet for 2018. The assumptions are as follows:

The firm has forecasted sales of $4,500,000 and a tax rate of 40% for 2018. Cost of goods sold, SG&A expense, and other expenses in 2018 are expected to be the average of their two-year proportion of sales. Depreciation in 2018 is assumed to the same as in 2017. On the balance sheet, accounts receivable, inventory, accounts payable, and other current liabilities are expected to be at the two-year average of the proportion of these items in relation to sales. All other financial statement items are expected to remain constant in 2018 (i.e., depreciation, cash, plant and equipment, short-term notes payable, and common stock). Assume the firm pays 3% interest on short-term debt and 8% on long term debt. Assume that the dividend per share in 2018 is $0.45 per share, and the total number of shares outstanding is 100,000.

a) What is the Discretionary Financing Needed (DFN) in 2018? Is this a surplus or deficit? b) DFN will be absorbed by long-term debt. Set up a forecasted Income Statement and Balance Sheet using long-term debt as plug item. c) Use the Scenario Manager to set up three scenarios for DFN:

1. Best Case Sales are 15% higher than expected.

2. Base Case Sales are exactly as expected.

3. Worst Case Sales are 15% less than expected.