5) EFN the most recent financial statement for summer tyme, Inc, are shown here:

Income statement

Sales: $4,200

Costs: $3,300

Taxable Income: $900

Balance sheet

current assets: $3,600

fixed assets: $7,900

total: $11,500

current Liabilities: $2,100

long-term debt: $3,650

equity: $5,750

Total: $11,500

Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40 percent dividend payout ratio. As with every other firm in its industry, next years sales are projected to increase by exactly 15 percent. What is the external financing needed?

9) calculating retained earnings from pro forma income. Consider the following income statement for the Heir Jordan corporation.

Heir Jordan Corporation income statement

Sales $38,000

Costs $18,400

Taxable Income $19,600

Taxes (34%) $6,664

Net income $12,936

Dividends $5,200

Addition to retained earnings $7,736

A 20 percent growth rate in sales is projected. Prepare a pro forma income statement assuming costs vary with sales and the dividend payout ratio is constant. What is the projected addition to retained earning?