Assets and costs are proportional to sales, Debt and Equity are not. A didvidend of $1560 was paid and the company wishes to maintain the constant didvidend pay out ratio. Next year sales are projected to be 27600 (20% growth). What is the external Financing needed? Solve the following Mini-Case Now Using Percentage of Sales. The 2015 financial statements for Growth Industries are presented below. Sales and costs in 2016 are projected to be 20% higher than in 2015. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at full capacity, so it plans to increase fixed assets in proportion to sales. What external financing will be required by the firm? Interest expense in 2016 will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of .40. Sales INCOME STATEMENT, 2015 $200,000 Costs 150,000 EBIT $ 50,000 Interest expense 10,000 Taxable income $ 40,000 Taxes (at 35%) 14,000 Net income $26,000 Dividends $10,400 Addition to retained earnings 515,600