Using the data in the student spreadsheet file Ethan Allen Financials.xlsx(to find the student spreadsheets for Financial Analysis with MicrosoftExcel, eighth edition, go to www.cengagebrain.com) forecast the June 30,2017 income statement and balance sheet for Ethan Allen. Use the percentof sales method and the following assumptions: (1) sales in FY 2017 willbe $797.3359; (2) the tax rate will be 35%; (3) each item that changes withsales will be the five-year average percentage of sales; (4) net fixed assetswill increase to $300; and (5) the common dividend will be $0.75 pershare. Use your judgment on all other items.

a.What is the discretionary financing needed in 2017? Is this a surplusor deficit?

b.Assume that the DFN will be absorbed by long-term debt and that theinterest 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 aconsistent percentage of sales? Does this fit your expectations?

d.Use the regression tool to verify your results from part c. Is the trendstatistically significant? Use at least three methods from theregression output to show why or why not. e.Turn off iteration and use the Scenario Manager to set up threescenarios:

1) Best CaseSales are 5% higher than expected.

2) Base CaseSales are exactly as expected.

3) Worst CaseSales are 5% less than expected.What is the DFN under each scenario?