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Jun '15 Jun '14 Ethan Allen Interiors Inc. Balance Sheet (Industrial) All figures in millions of U.S. Dollar, except per share items Jun '18 Jun '17 Jun '16 Assets Cash Only 22.363 57.701 52.659 Total Short Term Investments 0.000 0.000 0.000 Short-Term Receivables 12.364 12.293 9.467 Inventories 163.012 149.483 162.323 Other Current Assets 16.686 23.621 23.755 Total Current Assets 214.425 243.098 248.204 Property, Plant & Equipment - Gross 611.027 605.219 598.264 Accumulated Depreciation 343.124 335.021 324.649 Net Property, Plant & Equipment 267.903 270.198 273.615 Other Long-Term Assets 48.105 54.926 55.590 Total Assets 530.433 568.222 577.409 76.182 2.198 12.547 151.916 27.831 270.674 594.912 317.877 277.035 59.599 607.308 109.176 18.153 12.426 146.275 19.599 305.629 601.709 313.553 288.156 60.649 654.434 0.584 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 18.768 101.908 121.260 1.096 24.207 146.563 0.490 376.950 669.013 662.722 383.731 530.433 2.731 16.961 106.753 126.445 11.608 29.273 167.326 0.490 377.550 661.976 639.310 3.001 15.437 104.909 123.347 38.837 23.023 185.207 0.489 374.972 646.315 629.574 3.341 18.946 118.682 140.969 74.227 21.577 236.773 0.489 370.914 607.079 607.947 370.535 607.308 0.501 24.320 111.226 136.047 130.411 20.509 286.967 0.486 365.733 584.395 583.147 367.467 654.434 400.706 568.222 392.202 577.409 Source : FactSet Fundamentals Jun '14 746.659 340.163 Ethan Allen Interiors Inc. Income Statement (Industrial) All figures in millions of U.S. Dollar, except per share items Jun '18 Jun '17 Jun '16 Jun '15 Sales 766.784 763.385 794.202 754.600 Cost of Goods Sold (COGS) incl. D&A 350.820 343.662 351.966 343.437 Gross Income 415.964 419.723 442.236 411.163 SG&A Expense 367.097 361.773 353.057 345.229 EBIT (Operating Income) 48.867 57.950 89.179 65.934 Interest Expense 0.325 1.223 1.618 5.957 Other Income - Net 0.525 0.268 0.395 1.206 Unusual Expense - Net 0.000 0.000 0.000 4.500 Pretax Income 49.067 56.995 87.956 56.683 Income Taxes 12.696 20.801 31.319 19.541 Net Income 36.371 36.194 56.637 37.142 406.496 336.860 69.636 7.540 0.306 0.000 62.402 19.471 42.931 EPS (recurring) EPS (diluted) Diluted Shares Outstanding Total Shares Outstanding Dividends per Share Payout Ratio 1.32 1.32 27.63 26.53 0.76 57.72 1.29 1.29 27.96 27.45 0.74 57.36 2.00 2.00 28.32 27.75 0.62 31.00 1.38 1.27 29.18 28.41 0.50 39.37 1.47 1.47 29.28 28.93 0.40 27.21 EBITDA EBIT Depreciation & Amortization Expense 68.70 48.87 19.83 78.07 57.95 20.12 108.53 89.18 19.35 85.08 65.93 19.14 87.57 69.64 17.93 Source : FactSet Fundamentals 1. 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 $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? Jun '15 Jun '14 Ethan Allen Interiors Inc. Balance Sheet (Industrial) All figures in millions of U.S. Dollar, except per share items Jun '18 Jun '17 Jun '16 Assets Cash Only 22.363 57.701 52.659 Total Short Term Investments 0.000 0.000 0.000 Short-Term Receivables 12.364 12.293 9.467 Inventories 163.012 149.483 162.323 Other Current Assets 16.686 23.621 23.755 Total Current Assets 214.425 243.098 248.204 Property, Plant & Equipment - Gross 611.027 605.219 598.264 Accumulated Depreciation 343.124 335.021 324.649 Net Property, Plant & Equipment 267.903 270.198 273.615 Other Long-Term Assets 48.105 54.926 55.590 Total Assets 530.433 568.222 577.409 76.182 2.198 12.547 151.916 27.831 270.674 594.912 317.877 277.035 59.599 607.308 109.176 18.153 12.426 146.275 19.599 305.629 601.709 313.553 288.156 60.649 654.434 0.584 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 18.768 101.908 121.260 1.096 24.207 146.563 0.490 376.950 669.013 662.722 383.731 530.433 2.731 16.961 106.753 126.445 11.608 29.273 167.326 0.490 377.550 661.976 639.310 3.001 15.437 104.909 123.347 38.837 23.023 185.207 0.489 374.972 646.315 629.574 3.341 18.946 118.682 140.969 74.227 21.577 236.773 0.489 370.914 607.079 607.947 370.535 607.308 0.501 24.320 111.226 136.047 130.411 20.509 286.967 0.486 365.733 584.395 583.147 367.467 654.434 400.706 568.222 392.202 577.409 Source : FactSet Fundamentals Jun '14 746.659 340.163 Ethan Allen Interiors Inc. Income Statement (Industrial) All figures in millions of U.S. Dollar, except per share items Jun '18 Jun '17 Jun '16 Jun '15 Sales 766.784 763.385 794.202 754.600 Cost of Goods Sold (COGS) incl. D&A 350.820 343.662 351.966 343.437 Gross Income 415.964 419.723 442.236 411.163 SG&A Expense 367.097 361.773 353.057 345.229 EBIT (Operating Income) 48.867 57.950 89.179 65.934 Interest Expense 0.325 1.223 1.618 5.957 Other Income - Net 0.525 0.268 0.395 1.206 Unusual Expense - Net 0.000 0.000 0.000 4.500 Pretax Income 49.067 56.995 87.956 56.683 Income Taxes 12.696 20.801 31.319 19.541 Net Income 36.371 36.194 56.637 37.142 406.496 336.860 69.636 7.540 0.306 0.000 62.402 19.471 42.931 EPS (recurring) EPS (diluted) Diluted Shares Outstanding Total Shares Outstanding Dividends per Share Payout Ratio 1.32 1.32 27.63 26.53 0.76 57.72 1.29 1.29 27.96 27.45 0.74 57.36 2.00 2.00 28.32 27.75 0.62 31.00 1.38 1.27 29.18 28.41 0.50 39.37 1.47 1.47 29.28 28.93 0.40 27.21 EBITDA EBIT Depreciation & Amortization Expense 68.70 48.87 19.83 78.07 57.95 20.12 108.53 89.18 19.35 85.08 65.93 19.14 87.57 69.64 17.93 Source : FactSet Fundamentals 1. 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 $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

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