Question
1. Compute the external financing needed to support the projected annual sales growth. The most recent financial statements for Fleury, Inc., follow. Sales for 2012
1. Compute the external financing needed to support the projected annual sales growth.
The most recent financial statements for Fleury, Inc., follow. Sales for 2012 are projected to grow by 20%. Interest expense will remain constant. The tax rate and the dividend payout rate will remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 20 percent growth rate in sales?
Sales: $743,000
Costs: $578,000
Other Expenses: $15,200
EBIT: $149,800
Interest Expense $11,200
Taxable Income: $138,600
Taxes: $48,510
NET INCOME: $90,090
Dividends: $27,027
Add. To Retained Value: $63,063
Sales Increase: 20%
Tax Rate: 35%
*ASSETS*
Current Assets
Cash: $20,240
Accounts Receivable $32,560
Inventory: $69,520
TOTAL: $122,320
Fixed Assets
Net Plant and Equipment $$330,400
TOTAL ASSETS: $$452,720
*LIABILITIES AND OWNERS EQUITY*
Current Liabilities
Accounts Payable $54,400
Notes Payable $13,600
TOTAL: $68,000
Long-Term Debt $126,000
Owners Equity
Common Stocks and Paid-In Surplus $112,000
Retained Earnings $146,720
TOTAL: $258,720
Total Liabilitys And Owners Equity: $452,720
Complete the following analysis. Do not hard code values in your answer. Use formulas.
Dividend payout ratio Assets 2012 Pro Forma Income Statement Liabilities and owners' equity Current liabilities Sales Costs Other expenses EBIT Current assets Cash Accounts receivable Inventory Total Accounts payable Notes payable Total Interest expense Taxable income Fixed assets Long-term debt Taxes Net plant and equipment Net income Owners' equity Common stock and Dividends paid-in surplus Retained earnings Total Total liabilities and Add. To RE Total assets owners' equity External financing
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