10.

The most recent financial statements for Fleury Inc., follow. Sales for 2012 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets and accounts payable increase spontaneously with sales.

FLEURY, INC. 2011 Income Statement
Sales				$	751,000
Costs					586,000
Other expenses					22,000
Earnings before interest and taxes				$	143,000
Interest paid					18,000
Taxable income				$	125,000
Taxes (40%)					50,000
Net income					75,000
Dividends	$	30,000
Addition to retained earnings		45,000

FLEURY, INC. Balance Sheet as of December 31, 2011
Assets				Liabilities and Owners Equity
Current assets				Current liabilities
Cash	$	21,040		Accounts payable	$	55,200
Accounts receivable		33,360		Notes payable		14,400
Inventory		70,320		Total	$	69,600
Total	$	124,720		Long-term debt	$	134,000
Fixed assets				Owners equity
Net plant and equipment	$	240,000		Common stock and paid-in surplus	$	120,000
				Retained earnings		41,120
				Total	$	161,120
Total assets	$	364,720		Total liabilities and owners equity	$	364,720

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? (Do not round intermediate calculations.)

EFN

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