4 (Chapter 3). External Funds (Percent of Sales Approach.) Consider the Ganges Tours, Inc. financial statements again. Sales are projected to grow by 25 percent from 2019. Interest expense will remain constant; the tax rate and dividend payout ratio will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase proportionately with sales. If the firm is operating at full capacity and no new debt or equity is issued, what external financing (i.e., new debt or equity!) is needed to support the 25 percent growth rate in sales? Assets Current assets Cash Accounts Receivable Inventory Total Fixed assets Net F/A Ganges Tours, Inc. 12/31/2019 Balance Sheet Liabilities and Owners' Equity Current Liabilities $50.600 Accounts Payable $136,000 81,400 Notes Payable 34,000 173,800 Total 170,000 305,800 Long-term Debt 316,000 Owners' equity (OE) 826,000 C/S + surplus $280,000 Retained Earnings 365,800 Total OE $645,800 1,131,800 Total Liab and OE 1.131.800 Total Assets Ganges Tours, Inc. 2019 Income Statement Sales $1,858,000 Costs 1,446,000 Other expenses 38.000 EBIT $374,000 Interest Expense 28.000 Taxable Income $346,000 Taxes 121,100 Net Income $224,900 Dividends $67,470 Addition to RE $157,430