4. The most recent financial statements for Marius Surfing Supply Corp. are given below. Using the financial statements and the following information, create pro forma statements for next year and in doing so, calculate the total additional external financing needed (identifying all sources of funds and their respective amounts of funding). Show all calculations used to arrive at your answer.

• Sales are projected to grow by 50% next year.
• Assume that all costs, assets, and current liabilities will vary directly with sales.
• Also assume that the firm intends to keep its dividend payout ratio constant and that the firms tax rate will remain 34%.
• The current debtholders have placed a restriction on the firm that prohibits long-term debt from exceeding 40% of total assets.
• The managers of the firm wish to utilize long-term debt as much as possible as a source of financing, and then common stock as needed. The interest rate on long-term debt for next year is 10%.

This Year's Income Statement Balance Sheet for this year Cash Accounts Receivable Inventory Net Fixed Assets Total Assets 50 300 500 500 1350 Sales Cost of Goods Sold General/Admin. Expenses Depreciation Expense EBIT Interest Expense EBT Taxes (34%) Net Income Dividends Addition to Retained Earnings 1500 750 250 200 300 40 260 88.40 171.60 57.20 114.40 Accounts Payable Long-term debt Com. Stock & Paid-in Capital Retained Earnings Total Liab. & Owners' Equity 250 400 500 200 1350