Sales and Growth The most recent fi nancial statements for Fontenot Co. are shown here: Income Statement
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Sales and Growth The most recent fi nancial statements for Fontenot Co. are shown here:
Income Statement Balance Sheet Sales $54,000 Current assets $ 26,000 Long-term debt $ 58,000 Costs 34,800 Fixed assets 105,000 Equity 73,000 Taxable income $19,200 Total $131,000 Total $131,000 Taxes (34%) 6,528 Net income $12,672 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? LO.1
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