4 (Chapter 3). External Funds (Percent of Sales Approach.) Consider the Ganges Tours, Inc. financial statements again. Sales are projected to grow by 30 percent from 2020. 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 30 percent growth rate in sales? Assets Current assets Cash Accounts Receivable Inventory Total Fixed assets Net F/A Ganges Tours, Inc. 12/31/2020 Balance Sheet Liabilities and Owners' Equity Current Liabilities $12,500 Accounts Payable $30,000 25,000 Notes Payable 15,000 50.000 Total 45,000 87.500 Long-term Debt 100,000 Owners' equity (OE) 250.000 C/S + surplus 100,000 Retained Earnings 92,500 Total OE 192,500 337,500 Total Liab and OE 337,500 Total Assets Ganges Tours, Inc. 2020 Income Statement Sales $500,000 Cost of Goods Sold 350,000 Other expenses 25,000 EBIT $125,000 Interest Expense 15,000 Taxable Income $110,000 Taxes (21%) 16,170 Net Income $93,830 Dividends $40,000 Addition to RE $53,830