EFN The most recent financial statements for Martin, Inc., are shown here:

Income Statement Balance Sheet Sales Costs Taxable income Taxes (34%)

Net income

$37,300 25,800

$ 11,500 3,910

$ 7,590 Assets Total

$127,000

$127,000 Debt Equity Total

$ 30,500 96,500

$127,000 Assets and costs are proportional to sales. Debt and equity are not. A dividend of

$2,500 was paid, and Martin wishes to maintain a constant payout ratio. Next year’s sales are projected to be $42,300. What external financing is needed?