Please help solve #1. Data Attached. Thank you!
ETH Income Statement ETH Balance Sheet Ethan Allen Interiors Inc. Balance Sheet (Industrial) ures in millions of U.S. Dollar, except per share items Jun 16 Jun '15 Jun '14 Jun '13 Jun '12 Assets Cash Only Total Short Term Investments Short-Term Receivables Inventories Other Current Assets Total Current Assets Property, Plant & Equipment - Gross Accumulated Depreciation Net Property, Plant & Equipment Other Long-Term Assets Total Assets 52.659 76.182 0.000 2.198 9.467 12.547 162.323 151.916 23.755 27.831 248.2041 270.674 598.264 594.912 324.649 317.877 273.615 277.035 55.590 59.599 577.4091 607.308 109.176 72.601 79.721 18.153 15.529 9.005 12.426 12.277 14.919 146.275 137.256 155.739 19.599 22.907 23.408 305.6291 260.570282.792 601.709 594.385 587.368 313.553 302.713 291.673 288.156 291.672 295.695 60.649 65.043 66.301 654.434 617.285 644.788 Liabilities & Shareholders' Equity ST Debt & Curr. Portion LT Debt Accounts Payable Other Current Liabilities Total Current Liabilities Long-Term Debt Other Liabilities Total Liabilities Common Stock Par/Carry Value Additional Paid-In Capital Capital Surplus Retained Earnings Treasury Stock and Other Deductions from Equity Total Shareholders' Equity Total Liabilities & Shareholders' Equity 3.001 3.341 15.437 18.946 104.909 118.682 123.3471 140.9691 38.837 74.227 23.023 21.577 185.207236.773 0.489 0.489 374.972 370.914 646.315 607.079 629.574 607.947 392.2021 370.535 577.4091 607.308 0.501 24.320 111.226 136.047 130.411 20.509 286.967 0.486 365.733 584.395 583.147 367.4671 654.434 0.480 22.995 109.464 132.939| 130.809 19.180 282.928 0.486 363.938 553.083 583.150 334.357 617.285 0.250 27.315 123.512 151.077 154.250 17.593 322.920 0.485 361.165 542.918 582.700 321.868 644.788 Source: FactSet Fundamentals ETH Income Statement ETH Balance Sheet Ethan Allen Interiors Inc. Income Statement (Industrial) in millions of U.S. Dollar, except per share items Sales Cost of Goods Sold (COGS) incl. D&A Gross Income SG&A Expense EBIT (Operating Income) Interest Expense Other Income - Net Unusual Expense - Net Pretax Income Income Taxes Net Income Jun '16 794.202 351.966 442.236) 353.057 89.179 1.618 0.395 0.000 87.956 31.319 56.637 Jun '15 754.600 343.437 411.1631 345.229 65.934 5.957 1.206 4.500 56.683 19.541 37.142| Jun '14 746.659 340.163 406.496 336.860 69.636 7.540 0.306 0.000 62.4021 19.471 42.9311 Jun '13 729.083 330.734 398.3491 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 2.00 1.47 1.47 EPS (recurring) EPS (diluted) Diluted Shares Outstanding Total Shares Outstanding Dividends per Share Payout Ratio 2.00 28.32 27.75 0.62 31.00 1.38 1.27 29.18 28.41 0.50 39.37 29.28 28.93 0.40 27.21 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 Source : FactSet Fundamentals CHAPTER 5: Financial Statement Forecasting Page 142 145 TABLE 5-3 FUNCTIONS INTRODUCED IN THIS CHAPTER Purpose Function Calculate an Average(NUMBERI, NUMBER2, ...) arithmetic average Calculate straight-line SLN (COST, SALVAGE, LIFE) depreciation Forecast future outcomes based on a TREND(KNOWN_Y'S, KNOWN_XS, NEw_XS, CONST) time trend Find the intercept of a INTERCEPT(KNOWN_Y'S, KNOWN_X's) regression equation Find the slope of a SLOPE(KNOWN_Y'S, KNOWN_X'S) regression equation 154 163 163 Problems 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 following assumptions: (1) sales in FY 2017 will be $797.3359; (2) the tax rate will be 35%; (3) cach 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 2017? 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. c. Create a chart of cash versus sales and add a trend line. Is cash a consistent percentage of sales? Does this fit your expectations? d. Use the regression tool to verify your results from part c. Is the trend statistically significant? Use at least three methods from the regression output to show why or why not. e. Turn off iteration and use the Scenario Manager to set up three scenarios: 1) Best Case-Sales are 5% higher than 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? ETH Income Statement ETH Balance Sheet Ethan Allen Interiors Inc. Balance Sheet (Industrial) ures in millions of U.S. Dollar, except per share items Jun 16 Jun '15 Jun '14 Jun '13 Jun '12 Assets Cash Only Total Short Term Investments Short-Term Receivables Inventories Other Current Assets Total Current Assets Property, Plant & Equipment - Gross Accumulated Depreciation Net Property, Plant & Equipment Other Long-Term Assets Total Assets 52.659 76.182 0.000 2.198 9.467 12.547 162.323 151.916 23.755 27.831 248.2041 270.674 598.264 594.912 324.649 317.877 273.615 277.035 55.590 59.599 577.4091 607.308 109.176 72.601 79.721 18.153 15.529 9.005 12.426 12.277 14.919 146.275 137.256 155.739 19.599 22.907 23.408 305.6291 260.570282.792 601.709 594.385 587.368 313.553 302.713 291.673 288.156 291.672 295.695 60.649 65.043 66.301 654.434 617.285 644.788 Liabilities & Shareholders' Equity ST Debt & Curr. Portion LT Debt Accounts Payable Other Current Liabilities Total Current Liabilities Long-Term Debt Other Liabilities Total Liabilities Common Stock Par/Carry Value Additional Paid-In Capital Capital Surplus Retained Earnings Treasury Stock and Other Deductions from Equity Total Shareholders' Equity Total Liabilities & Shareholders' Equity 3.001 3.341 15.437 18.946 104.909 118.682 123.3471 140.9691 38.837 74.227 23.023 21.577 185.207236.773 0.489 0.489 374.972 370.914 646.315 607.079 629.574 607.947 392.2021 370.535 577.4091 607.308 0.501 24.320 111.226 136.047 130.411 20.509 286.967 0.486 365.733 584.395 583.147 367.4671 654.434 0.480 22.995 109.464 132.939| 130.809 19.180 282.928 0.486 363.938 553.083 583.150 334.357 617.285 0.250 27.315 123.512 151.077 154.250 17.593 322.920 0.485 361.165 542.918 582.700 321.868 644.788 Source: FactSet Fundamentals ETH Income Statement ETH Balance Sheet Ethan Allen Interiors Inc. Income Statement (Industrial) in millions of U.S. Dollar, except per share items Sales Cost of Goods Sold (COGS) incl. D&A Gross Income SG&A Expense EBIT (Operating Income) Interest Expense Other Income - Net Unusual Expense - Net Pretax Income Income Taxes Net Income Jun '16 794.202 351.966 442.236) 353.057 89.179 1.618 0.395 0.000 87.956 31.319 56.637 Jun '15 754.600 343.437 411.1631 345.229 65.934 5.957 1.206 4.500 56.683 19.541 37.142| Jun '14 746.659 340.163 406.496 336.860 69.636 7.540 0.306 0.000 62.4021 19.471 42.9311 Jun '13 729.083 330.734 398.3491 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 2.00 1.47 1.47 EPS (recurring) EPS (diluted) Diluted Shares Outstanding Total Shares Outstanding Dividends per Share Payout Ratio 2.00 28.32 27.75 0.62 31.00 1.38 1.27 29.18 28.41 0.50 39.37 29.28 28.93 0.40 27.21 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 Source : FactSet Fundamentals CHAPTER 5: Financial Statement Forecasting Page 142 145 TABLE 5-3 FUNCTIONS INTRODUCED IN THIS CHAPTER Purpose Function Calculate an Average(NUMBERI, NUMBER2, ...) arithmetic average Calculate straight-line SLN (COST, SALVAGE, LIFE) depreciation Forecast future outcomes based on a TREND(KNOWN_Y'S, KNOWN_XS, NEw_XS, CONST) time trend Find the intercept of a INTERCEPT(KNOWN_Y'S, KNOWN_X's) regression equation Find the slope of a SLOPE(KNOWN_Y'S, KNOWN_X'S) regression equation 154 163 163 Problems 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 following assumptions: (1) sales in FY 2017 will be $797.3359; (2) the tax rate will be 35%; (3) cach 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 2017? 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. c. Create a chart of cash versus sales and add a trend line. Is cash a consistent percentage of sales? Does this fit your expectations? d. Use the regression tool to verify your results from part c. Is the trend statistically significant? Use at least three methods from the regression output to show why or why not. e. Turn off iteration and use the Scenario Manager to set up three scenarios: 1) Best Case-Sales are 5% higher than 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
