The most recent financial statements for Hailey Co. are shown here:

Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued?

Transcribed Image Text:

Income Statement Balance Sheet Sales $49,000 Current $ 27,000 Long- $ 59,000 assets term Costs 23.600 debt Fixed 120.000 Equity $147,000 Таxable assets 88.000 income $25,400 Total Total $147,000 Тахes (21%) 5.334 Net income $20,066