Cholesterol Dairy Products has plants in five provinces and operates a very large home delivery service. 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)AssetsLiabilities and Shareholders' EquityCash$8Accounts payable$8Accounts receivable14Accrued wages7Inventory15Accrued taxes6Current assets$37Current liabilities$21Capital assets37Long-term debt10 Common stock15 Retained earnings28Total assets$74Total liabilities and shareholder's equity$74

The firm has an aftertax profit margin of 5 percent and a dividend payout ratio of 30 percent.

a. If sales grow by 15 percent next year, determine how many dollars of new funds are needed to finance the expansion. (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. (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 3 decimal places.)

Balance Sheet ($ millions)AssetsLiabilities and Shareholders' EquityCurrent assetsCurrent liabilities (Click to select) Prepaid expenses Inventory Capital Asset Cash Accounts receivable $ (Click to select) Common stock Accrued taxes Accrued wages Accounts payable Retained earnings $ (Click to select) Prepaid expenses Cash Capital Asset Accounts receivable Inventory (Click to select) Accrued wages Retained earnings Accounts payable Common stock Long-term debt (Click to select) Cash Accounts receivable Prepaid expenses Gross plant Inventory (Click to select) Accrued taxes Retained earnings Accounts payable Common stock Long-term debt Current assets$ Current liabilities$ (Click to select) Capital Assets Accounts Receivable Inventory Accrued wages Cash (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. (Round the final answers to 2 decimal places.)

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