Greg's Graphics Company owns and operates a small chain of sportswear stores located near colleges and universities. Greg's Graphics has experienced significant growth in recent years. The following data are available for Greg's Graphics:

Required:
1. Calculate how much Greg's Graphics' sales, net income, and assets have grown during these three years.
2. Explain how Greg's Graphics has financed the increase in assets.
3. Discuss whether Greg's Graphics' liquidity is adequate.
4. Explain why interest expense is growing.
5. If Greg's Graphics' sales grow by 25 percent in 2010, what would you expect net income to be?
6. If Greg's Graphics' assets must grow by 25 percent to support the 25 percent sales increase and if 50 percent of net income is paid in dividends, how much capital must Greg's Graphicsraise?

Greg's Graphics Company Comparative Statements of Income Year Ended December 31, (In thousands) 2009 $54,922 5 21,721 Cost of goods sold Gross margin Other income, net 25,682 nses: Selling and administrative $13,376 $2,122 850 15,528 Income before income taxes Provision for income ta>x Net income $ 2,285 1,376 $ 227 Greg's Graphics Company Comparative Balance Sheets (In thousands) December 31, ASSETS 8 nt assets: 0 receiva 4,798 Inventories Total current assets S 8,368 S 7,003 Property, plant, and equipment (net) Other assets $16,347 $10,492 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term notes payable Accounts payable 8 2 Total current liabilities Long-term debt Total liabilities Paid-in capital Retained earnings $4,725 Total stockholders' equity Total liabilities and stockholders' equity $16,347 $12,501 $10,492