East Cost Yachts			East Cost Yachts
2017 Income Statement			2017 Balance Sheet
Sales	$611,582,000		Current Assets			Current liabilities
Cost of Goods Sold	431,006,000		Cash and equivalents	$11,119,700		Accounts payable	$44,461,550
Selling, general & admin expenses	73,085,700		Accounts receivable	18,681,500		Accrued expenses	6,123,200
Depreciation	19,958,400		Inventory	20,149,650		Total current liabilities	$50,584,750
EBIT	$87,531,900		Other	1,172,200
Interest expense	11,000,000		Total current assets	$51,123,050
EBT	$76,531,900		Fixed assets			Long-term debt	$169,260,000
Taxes	30,612,400		Property, plant and equipment	$457,509,600		Total long-term liabilities	$169,260,000
Net Income	$45,919,500		Less accumulated depreciation	(113,845,900)
Dividends	$17,374,500		Net property, plant and equipment	$343,663,700
Retained Earnings	$28,544,100		Intangible assets and others	6,772,000		Stockholders' equity
			Total fixed assets	$350,435,700		Preferred stock	$1,970,000
						Common stock	37,583,700
						Capital surplus	28,116,300
						Accumulated retained earnings	161,564,000

GIven this information:

6. Assume that East Coast Yachts is currently producing at 100% of capacity and sales are expected to grow at 20%. As a result, to expand production, the company must set up an entirely new line at a cost of $95,000,000. Prepare the proforma income statement and balance sheet. What is the new EFN with these assumptions? What does this imply about capacity utilization for East Coast Yachts next year?
Sustainable Growth Rate:	20%
At the sustainable growth rate, the pro forma statements next year will be:

Income statement			East Cost Yachts
Sales			2017 Balance Sheet
COGS			Current Assets			Current liabilities
Other expenses			Cash and equivalents			Accounts payable
Depreciation			Accounts receivable			Accrued expenses
EBIT			Inventory			Total current liabilities
Interest			Other
Taxable income			Total current assets
Taxes (40%)						Long-term debt
Net income			Fixed assets			Total long-term liabilities
Dividends
Add to RE						Stockholders' equity
						Preferred stock
						Common stock
						Capital surplus
						Accumulated retained earnings
						Less treasury stock
						Total equity
			Total assets			Total liabilities and shareholders' equity
EFN =
Conclusion and Recommendation: