The most recent financial statements for xyz inc. follow. Sales for 2019 are projected to grow by 22 percent. Interest expense will remain constant, the tax rate and dividend payout rate will also remain constant. Costs, other expenses, current assets, and accounts payable increase spontaneously with sales. If the firm is operating at full capacity and no new debt or equity is issued. How much external financing is needed to support the 16 percent growth rate in sales? Income statement 2019 Net sales 17,300 Cost of Goods Sold 10,600 Depreciation 3,250 Earning before interest and taxes 3,450 Interest paid 680 Taxable income 2,770 Taxes 940 Net income 1830 Dividends 450 Addition to RE 1380 Balance Sheet 2019 2019 2019 Cash 350 Accounts rec 940 Inventory 2360 Total 3650 Net fixed assets 10,850 Total Assets 14500 Accounts payable 1920 Long term debt 3500 Common stock 7500 Retained earning 1580 Total liabilities and equity 14,500
The most recent financial statements for xyz inc. follow. Sales for 2019 are projected to grow by 22 percent. Interest expense will remain constant, the tax
Income statement 2019
Net sales 17,300
Cost of Goods Sold 10,600
Depreciation 3,250
Earning before interest and taxes 3,450
Interest paid 680
Taxable income 2,770
Taxes 940
Net income 1830
Dividends 450
Addition to RE 1380
Balance Sheet 2019
|
2019 |
2019 |
|
Cash 350 Accounts rec 940 Inventory 2360 Total 3650 Net fixed assets 10,850 Total Assets 14500 |
Accounts payable 1920 Long term debt 3500 Common stock 7500 Retained earning 1580 Total liabilities and equity 14,500 |
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