Calculate LEE Corp.s external funds needed (EFN) for the fiscal year of 2019 using the pro forma statement approach. Assume that the percentages of sales for cost of goods sold, current assets and current liabilities remain unchanged at their respective values in 2018. In addition, the dividend payout ratio is assumed to remain unchanged. It is also assumed that the plant capacity of LEE Corporation was underutilized in 2018 such that existing fixed assets can support the 10% projected growth rate in the sales level for 2019. < > Note: This problem is part of this homework assignment!

Lee Corp

Income Statement (in millions) 2018

NET SALES	$1800
COST OF GOODS SOLD	$1250
DEPRECIATION EXPENSES	$180
EARNINGS BEFORE INTEREST AND TAXES	$420
INTEREST EXPENSES	$20
TAXABLE INCOME	$400
TAXES (21%)	$84
NET INCOME	$316
DIVIDENDS PAID	$190

Balance Sheet (in millions) 2017 2018

CURRENT ASSETS	$536	$520
NET FIXED ASSETS	$2,164	$2,100
TOTAL ASSETS	$2,700	$2,620
CURRENT LIABILITIES	$980	$900
LONG-TERM DEBT	$278	$218
COMMON STOCK & PAID-IN CAPITAL	$700	$634
RETAINED EARNINGS	$742	$868
TOTAL LIABILITIES & EQUITY	$2,700	$2,620

PLEASE PROVIDE ALL EQUATIONS FOR CREDIT