Britney Spears Company has plants in four provinces. Sales last year were $100 million, and the balance sheet at year-end is similar in percent of sales to that of previous years (and this will continue in the future). All assets and current liabilities will vary directly with sales. Assume the firm is already using capital assets at full capacity.

Balance Sheet (in $ millions)
Assets		Liabilities and Shareholders' Equity
Cash	$9	Accounts payable	$9
Accounts receivable	15	Accrued wages	8
Inventory	10	Accrued taxes	7
Current assets	34	Current liabilities	24
Capital assets	34	Long-term debt	10
		Common stock	15
		Retained earnings	19
Total assets	$68	Total liabilities and shareholders' equity	$68

The firm has an aftertax profit margin of 8 percent and a dividend payout ratio of 40 percent.

a. If sales grow by 20 percent next year, determine how many dollars of new funds are needed to finance the expansion. (Do not round intermediate calculations. Enter the answer in millions. Round the final answer to 3 decimal places.)

The firm needs $ million in external funds.

b. Prepare a pro forma balance sheet with any financing adjustment made to long-term debt. (Do not round intermediate calculations. Input all answers as positive values. Be sure to list the assets and liabilities in order of their liquidity. Enter the answers in millions. Round the final answers to 2 decimal places.)

Balance Sheet ($ millions)
Assets		Liabilities and Shareholders' Equity
(Click to select) Inventory Prepaid expenses Accounts receivable Capital Asset Cash	$	(Click to select) Retained earnings Accounts payable Accrued wages Common stock Accrued taxes	$
(Click to select) Cash Accounts receivable Capital Asset Prepaid expenses Inventory		(Click to select) Accrued wages Retained earnings Accounts payable Common stock Long-term debt
(Click to select) Accounts receivable Gross plant Inventory Cash Prepaid expenses		(Click to select) Accrued taxes Retained earnings Accounts payable Common stock Long-term debt
Current assets	$	Current liabilities	$
(Click to select) Accrued wages Cash Inventory Accounts Receivable Capital Assets		(Click to select) Long-term debt Accrued wages Accounts payable Accrued taxes
		(Click to select) Common stock Accrued wages Accounts payable Accrued taxes	$
		(Click to select) Retained earnings Accrued wages Accounts payable Accrued taxes
Total assets	$	Total liabilities and shareholders' equity	$

c. Calculate the current ratio and total debt to assets ratio for each year. (Do not round intermediate calculations. Round the final answers to 1 decimal places.)

	Year 1	Year 2
Current ratio	X	X
Total debt / assets	%	%