Question
Using the data in the student spreadsheet file Ethan Allen Financials.xlsx forecast the June 30, 2019 income statement and balance sheet for Ethan Allen. Use
Using the data in the student spreadsheet file Ethan Allen Financials.xlsx 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 $797.3359; (2) the tax rate will be 35%; (3) each 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 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.
INCOME STATEMENT
Jun '19 | Jun '18 | Jun '17 | Jun '16 | Jun '15 | Jun '14 | |
Sales | 797.336 | 794.202 | 754.600 | 746.659 | 729.083 | 729.373 |
Cost of Goods Sold (COGS) incl. D&A | 362.374 | 351.966 | 343.437 | 340.163 | 330.734 | 339.085 |
Gross Income | 434.962 | 442.236 | 411.163 | 406.496 | 398.349 | 390.288 |
SG&A Expense | 364.184 | 353.057 | 345.229 | 336.860 | 337.912 | 340.676 |
EBIT (Operating Income) | 70.778 | 89.179 | 65.934 | 69.636 | 60.437 | 49.612 |
Interest Expense | 1.618 | 5.957 | 7.540 | 8.778 | 9.020 | |
Other Income - Net | 0.198 | 0.395 | 1.206 | 0.306 | -1.485 | 0.562 |
Unusual Expense - Net | 0.932 | 0.000 | 4.500 | 0.000 | 0.000 | -0.085 |
Pretax Income | 87.956 | 56.683 | 62.402 | 50.174 | 41.239 | |
Income Taxes | 16.599 | 31.319 | 19.541 | 19.471 | 17.696 | -8.455 |
Net Income | 56.637 | 37.142 | 42.931 | 32.478 | 49.694 | |
EPS (recurring) | 2.00 | 1.38 | 1.47 | 1.11 | 1.71 | |
EPS (diluted) | 2.00 | 1.27 | 1.47 | 1.11 | 1.71 | |
Diluted Shares Outstanding | 28.32 | 29.18 | 29.28 | 29.24 | 29.11 | |
Total Shares Outstanding | 27.75 | 28.41 | 28.93 | 28.91 | 28.84 | |
Dividends per Share | 0.62 | 0.50 | 0.40 | 0.36 | 0.30 | |
Payout Ratio | 31.00 | 39.37 | 27.21 | 32.43 | 17.54 | |
EBITDA | 108.53 | 85.08 | 87.57 | 78.45 | 68.19 | |
EBIT | 89.18 | 65.93 | 69.64 | 60.44 | 49.61 | |
Depreciation & Amortization Expense | 19.35 | 19.14 | 17.93 | 18.01 | 18.58 |
BALANCE SHEET
Jun '19 | Jun '18 | Jun '17 | Jun '16 | Jun '15 | Jun '14 | |
Assets | ||||||
Cash Only | 52.659 | 76.182 | 109.176 | 72.601 | 79.721 | |
Total Short Term Investments | 0.000 | 2.198 | 18.153 | 15.529 | 9.005 | |
Short-Term Receivables | 9.467 | 12.547 | 12.426 | 12.277 | 14.919 | |
Inventories | 162.323 | 151.916 | 146.275 | 137.256 | 155.739 | |
Other Current Assets | 23.755 | 27.831 | 19.599 | 22.907 | 23.408 | |
Total Current Assets | 248.204 | 270.674 | 305.629 | 260.570 | 282.792 | |
Property, Plant & Equipment - Gross | 598.264 | 594.912 | 601.709 | 594.385 | 587.368 | |
Accumulated Depreciation | 324.649 | 317.877 | 313.553 | 302.713 | 291.673 | |
Net Property, Plant & Equipment | 273.615 | 277.035 | 288.156 | 291.672 | 295.695 | |
Other Long-Term Assets | 55.590 | 59.599 | 60.649 | 65.043 | 66.301 | |
Total Assets | 577.409 | 607.308 | 654.434 | 617.285 | 644.788 | |
Liabilities & Shareholders' Equity | ||||||
ST Debt & Curr. Portion LT Debt | 3.001 | 3.341 | 0.501 | 0.480 | 0.250 | |
Accounts Payable | 15.437 | 18.946 | 24.320 | 22.995 | 27.315 | |
Other Current Liabilities | 104.909 | 118.682 | 111.226 | 109.464 | 123.512 | |
Total Current Liabilities | 123.347 | 140.969 | 136.047 | 132.939 | 151.077 | |
Long-Term Debt | 38.837 | 74.227 | 130.411 | 130.809 | 154.250 | |
Other Liabilities | 23.023 | 21.577 | 20.509 | 19.180 | 17.593 | |
Total Liabilities | 185.207 | 236.773 | 286.967 | 282.928 | 322.920 | |
Common Stock Par/Carry Value | 0.489 | 0.489 | 0.486 | 0.486 | 0.485 | |
Additional Paid-In Capital/Capital Surplus | 374.972 | 370.914 | 365.733 | 363.938 | 361.165 | |
Retained Earnings | 646.315 | 607.079 | 584.395 | 553.083 | 542.918 | |
Treasury Stock and Other Deductions from Equity | 629.574 | 607.947 | 583.147 | 583.150 | 582.700 | |
Total Shareholders' Equity | 392.202 | 370.535 | 367.467 | 334.357 | 321.868 | |
Total Liabilities & Shareholders' Equity | 577.409 | 607.308 | 654.434 | 617.285 | 644.788 |
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