Please use the Ethan Allen Financial data below in the following Excel file to do Chapter 5 Problem 1 on page 175 and 176 of the textbook with the following modifications.
Only do Chapter 5 Problems A. / C. / D. / AND E. (Ignore the words "Turn off iteration and')
PLEASE SHOW ALL FORMULAS ON EXCEL.
INCOME STATEMENT
BALANCE SHEET
\begin{tabular}{|r|l|r|r|r|r|r|r|} \hline 3 & \multicolumn{3}{l}{} & & Actual \\ \hline 4 & & Jun ' 18 & Jun '17 & Jun '16 & Jun '15 & Jun '14 & Jun '19 \\ \hline 5 & Sales & 766.784 & 763.385 & 794.202 & 754.600 & 746.659 & 746.684 \\ \hline 6 & Cost of Goods Sold (COGS) incl. D\&A & 350.820 & 343.662 & 351.966 & 343.437 & 340.163 & 337.193 \\ \hline 7 & Gross Income & 415.964 & 419.723 & 442.236 & 411.163 & 406.496 & 409.491 \\ \hline 8 & SG\&A Expense & 367.097 & 361.773 & 353.057 & 345.229 & 336.860 & 357.164 \\ \hline 9 & EBIT (Operating Income) & 48.867 & 57.950 & 89.179 & 65.934 & 69.636 & 52.327 \\ \hline 10 & Interest Expense & 0.325 & 1.223 & 1.618 & 5.957 & 7.540 & 0.087 \\ \hline 11 & Other Income - Net & 0.525 & 0.268 & 0.395 & 1.206 & 0.306 & 0.000 \\ \hline 12 & Unusual Expense - Net & 0.000 & 0.000 & 0.000 & 4.500 & 0.000 & 18.380 \\ \hline 13 & Pretax Income & 49.067 & 56.995 & 87.956 & 56.683 & 62.402 & 33.860 \\ \hline 14 & Income Taxes & 12.696 & 20.801 & 31.319 & 19.541 & 19.471 & 8.162 \\ \hline 15 & Net Income & 36.371 & 36.194 & 56.637 & 37.142 & 42.931 & 25.698 \\ \hline \end{tabular} 18 EPS (recurring) 19 EPS (diluted) 20 Diluted Shares Outstanding 21 Total Shares Outstanding 22 Dividends per Share 23 Payout Ratio \begin{tabular}{|r|r|r|r|r|r|} \hline 1.32 & 1.29 & 2.00 & 1.38 & 1.47 & \\ \hline 1.32 & 1.29 & 2.00 & 1.27 & 1.47 & 0.96 \\ \hline 27.63 & 27.96 & 28.32 & 29.18 & 29.28 & 26.75 \\ \hline 26.53 & 27.45 & 27.75 & 28.41 & 28.93 & \\ \hline 0.76 & 0.74 & 0.62 & 0.50 & 0.40 & 0.76 \\ \hline 57.72 & 57.36 & 31.00 & 39.37 & 27.21 & \\ \hline & & & & & \\ \hline 68.70 & 78.07 & 108.53 & 85.08 & 87.57 & 71.93 \\ \hline 48.87 & 57.95 & 89.18 & 65.93 & 69.64 & 33.95 \\ \hline 19.83 & 20.12 & 19.35 & 19.14 & 17.93 & 19.60 \\ \hline \end{tabular} Source : FactSet Fundamentals 18 Liabilities \& Shareholders' Equity 19 ST Debt \& Curr. Portion LT Debt 20 Accounts Payable \begin{tabular}{|r|r|r|r|r|r|} \hline 0.584 & 2.731 & 3.001 & 3.341 & 0.501 & 0.550 \\ \hline 18.768 & 16.961 & 15.437 & 18.946 & 24.320 & 35.485 \\ \hline 101.908 & 106.753 & 104.909 & 118.682 & 111.226 & 86.791 \\ \hline 121.260 & 126.445 & 123.347 & 140.969 & 136.047 & 122.826 \\ \hline 1.096 & 11.608 & 38.837 & 74.227 & 130.411 & 0.516 \\ \hline 24.207 & 29.273 & 23.023 & 21.577 & 20.509 & 23.080 \\ \hline 146.563 & 167.326 & 185.207 & 236.773 & 286.967 & 146.422 \\ \hline 0.490 & 0.490 & 0.489 & 0.489 & 0.486 & \\ \hline 376.950 & 377.550 & 374.972 & 370.914 & 365.733 & \\ \hline 669.013 & 661.976 & 646.315 & 607.079 & 584.395 & \\ \hline 662.722 & 639.310 & 629.574 & 607.947 & 583.147 & \\ \hline 383.731 & 400.706 & 392.202 & 370.535 & 367.467 & 363.866 \\ \hline 530.433 & 568.222 & 577.409 & 607.308 & 654.434 & 510.351 \\ \hline \end{tabular} Source : FactSet Fundamentals Using the data in the student spreadsheet file Ethan Allen Financials.xlsx (to find the student spreadsheets for Financial Analysis with Microsoft Excel, ninth edition, go to (www.cengage.com/finance/mayes/analysis/9e), forecast the June 30,2019 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 $761.20; (2) The tax rate will be 25%; (3) Each item that changes with sales will be the five-year average percentage of sales; (4) Property, Plant \& Equipment - Gross will increase to $650; and (5) The dividend will be $0.90 per share. Use your judgment on all other items. a. What is the DFN 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. c. Create a chart of cash vs. 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? \begin{tabular}{|r|l|r|r|r|r|r|r|} \hline 3 & \multicolumn{3}{l}{} & & Actual \\ \hline 4 & & Jun ' 18 & Jun '17 & Jun '16 & Jun '15 & Jun '14 & Jun '19 \\ \hline 5 & Sales & 766.784 & 763.385 & 794.202 & 754.600 & 746.659 & 746.684 \\ \hline 6 & Cost of Goods Sold (COGS) incl. D\&A & 350.820 & 343.662 & 351.966 & 343.437 & 340.163 & 337.193 \\ \hline 7 & Gross Income & 415.964 & 419.723 & 442.236 & 411.163 & 406.496 & 409.491 \\ \hline 8 & SG\&A Expense & 367.097 & 361.773 & 353.057 & 345.229 & 336.860 & 357.164 \\ \hline 9 & EBIT (Operating Income) & 48.867 & 57.950 & 89.179 & 65.934 & 69.636 & 52.327 \\ \hline 10 & Interest Expense & 0.325 & 1.223 & 1.618 & 5.957 & 7.540 & 0.087 \\ \hline 11 & Other Income - Net & 0.525 & 0.268 & 0.395 & 1.206 & 0.306 & 0.000 \\ \hline 12 & Unusual Expense - Net & 0.000 & 0.000 & 0.000 & 4.500 & 0.000 & 18.380 \\ \hline 13 & Pretax Income & 49.067 & 56.995 & 87.956 & 56.683 & 62.402 & 33.860 \\ \hline 14 & Income Taxes & 12.696 & 20.801 & 31.319 & 19.541 & 19.471 & 8.162 \\ \hline 15 & Net Income & 36.371 & 36.194 & 56.637 & 37.142 & 42.931 & 25.698 \\ \hline \end{tabular} 18 EPS (recurring) 19 EPS (diluted) 20 Diluted Shares Outstanding 21 Total Shares Outstanding 22 Dividends per Share 23 Payout Ratio \begin{tabular}{|r|r|r|r|r|r|} \hline 1.32 & 1.29 & 2.00 & 1.38 & 1.47 & \\ \hline 1.32 & 1.29 & 2.00 & 1.27 & 1.47 & 0.96 \\ \hline 27.63 & 27.96 & 28.32 & 29.18 & 29.28 & 26.75 \\ \hline 26.53 & 27.45 & 27.75 & 28.41 & 28.93 & \\ \hline 0.76 & 0.74 & 0.62 & 0.50 & 0.40 & 0.76 \\ \hline 57.72 & 57.36 & 31.00 & 39.37 & 27.21 & \\ \hline & & & & & \\ \hline 68.70 & 78.07 & 108.53 & 85.08 & 87.57 & 71.93 \\ \hline 48.87 & 57.95 & 89.18 & 65.93 & 69.64 & 33.95 \\ \hline 19.83 & 20.12 & 19.35 & 19.14 & 17.93 & 19.60 \\ \hline \end{tabular} Source : FactSet Fundamentals 18 Liabilities \& Shareholders' Equity 19 ST Debt \& Curr. Portion LT Debt 20 Accounts Payable \begin{tabular}{|r|r|r|r|r|r|} \hline 0.584 & 2.731 & 3.001 & 3.341 & 0.501 & 0.550 \\ \hline 18.768 & 16.961 & 15.437 & 18.946 & 24.320 & 35.485 \\ \hline 101.908 & 106.753 & 104.909 & 118.682 & 111.226 & 86.791 \\ \hline 121.260 & 126.445 & 123.347 & 140.969 & 136.047 & 122.826 \\ \hline 1.096 & 11.608 & 38.837 & 74.227 & 130.411 & 0.516 \\ \hline 24.207 & 29.273 & 23.023 & 21.577 & 20.509 & 23.080 \\ \hline 146.563 & 167.326 & 185.207 & 236.773 & 286.967 & 146.422 \\ \hline 0.490 & 0.490 & 0.489 & 0.489 & 0.486 & \\ \hline 376.950 & 377.550 & 374.972 & 370.914 & 365.733 & \\ \hline 669.013 & 661.976 & 646.315 & 607.079 & 584.395 & \\ \hline 662.722 & 639.310 & 629.574 & 607.947 & 583.147 & \\ \hline 383.731 & 400.706 & 392.202 & 370.535 & 367.467 & 363.866 \\ \hline 530.433 & 568.222 & 577.409 & 607.308 & 654.434 & 510.351 \\ \hline \end{tabular} Source : FactSet Fundamentals Using the data in the student spreadsheet file Ethan Allen Financials.xlsx (to find the student spreadsheets for Financial Analysis with Microsoft Excel, ninth edition, go to (www.cengage.com/finance/mayes/analysis/9e), forecast the June 30,2019 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 $761.20; (2) The tax rate will be 25%; (3) Each item that changes with sales will be the five-year average percentage of sales; (4) Property, Plant \& Equipment - Gross will increase to $650; and (5) The dividend will be $0.90 per share. Use your judgment on all other items. a. What is the DFN 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. c. Create a chart of cash vs. 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
