Forecast the June 30, 2014, income statement and balance sheet for Procter & Gamble. Use the percent of sales method and the following assumptions" 1) Sales in FY 2014 will be $85,000; 2) The tax rate will be 25.24%; 3) Each item that changes with sales will be the five-year average percentage of sales; 4) No preferred dividends will be paid; and 5) The common dividend payout ratio will be 50% of income available to common stockholdres. Use your judgement on all other items.

PROCTER & GAMBLE CO (PG)
Income Statement
For the Fiscal Years Ending June 2009 to 2013
	2014*	2013	2012	2011	2010	2009
Revenue	85,000	84,167	83,680	82,559	78,938	79,029
Cost of revenue		42,428	42,391	40,768	37,919	38,898
Gross profit		41,739	41,289	41,791	41,019	40,131
Sales, General and administrative		26,950	26,421	25,973	24,998	24,008
Other operating expenses		308	1,576	-	-	-
Operating income		14,481	13,292	15,818	16,021	16,123
Interest Expense		667	769	831	946	1,358
Other income (expense)		1,029	262	202	(28)	560
Income before taxes		14,843	12,785	15,189	15,047	15,325
Provision for income taxes		3,441	3,468	3,392	4,101	4,032
Net income from continuing operations		11,402	9,317	11,797	10,946	11,293
Net income from discontinuing ops		-	1,587	-	1,790	2,143
Other		(90)	(148)	-	-	-
Net income		11,312	10,756	11,797	12,736	13,436
*Forecast
Preferred dividend		-	-	233	219	192
Net income available to common shareholders		11,312	10,756	11,564	12,517	13,244
Common dividends		6,519	6,139	5,767	5,458	5,044
Earnings per share:
Basic		4.04	3.82	4.12	4.32	4.49
Diluted		3.86	3.66	3.93	4.11	4.26
Weighted average shares outstanding:
Basic		2,743	2,751	2,804	2,901	2,952
Diluted		2,931	2,941	3,002	3,099	3,154
EBITDA		18,492	16,758	18,858	19,101	19,765
Source: Morningstar Direct (retrieved 24 February 2014)
Fiscal year ends in June. USD in millions except per share data.

A. What is the discretionary financing needed in 2014? Is this a surplus or deficit? B. Assume that the DFN will be absorbed by long-term debt and that the total interest rate is 4.38% of LTD. Set up an iterative worksheet to eliminate it. C. Create a chart of cash vs. sales and add a linear trend line. Is the cash balance a consistent percentage of sales? Does the relationship fit your expectations? D. Use the regression tool to verify your seults from part c. Is the trend statistically significant? Use at least three methods to show why or why not. E. Turn off iteration, a nd sue the Scenario Manager to set up three scenarios: !. Best case--Sales are 5% higher tahn expected. 2. Base case -- Sales are exactly as expected. 3. Worst case--Sales are 5% less than expected. What is the DFN under each scenario?