1. East Coast Yachts is planning a growth rate of 20%. What is the External Financing Needed when sales grow at a rate of 20%? Derive the Pro-Forma Income Statement and Balance Sheet. (assume that costs and other expenses vary directly with sales, but depreciation and interest expense are not affected by any change in the sales level. It takes time for the initial investment to depreciate, so, to simplify the analysis, we are going to assume that depreciation is unaffected by changes in sales.)

2015 income statement

sales	210,900,000
cost of goods sold	148,600,000
other expenses	25,192,000
depreciation	6,879,000
earnings before taxes	30,229,000
interest	3,791,000
taxable income	26,438,000
taxes (40%)	10,575,200
net income	15,862,800

Dividends: 4,759,301

Add to RE : 11,103,499

Balance Sheet

assets		liability and equities
current assets		accounts payable	6,977,700
cash	3,285,600	notes payable	14,342,600
accounts rec.	5,910,800	total	21,320,300
inventory	6,627,300	long term debt	36,400,000
total	15,823,700	shareholders equity
fixed assets		common stock	5,580,000
net plant and equipment	101,481,200	retained earnings	54,004,600
		total equity	59,584,600
total assets	117,304,900	total liability and equity	117,304,900