Executive Fruits financial manager believes that sales in 2015 could rise by as much as 20% or by as little as 5%. Assets and costs change in proportion to sales, debt remains constant, and no new equity financing occurs.

a.	Recalculate the first-stage pro forma financial statements under these two growth assumptions and calculate the required external financing (All figures are in thousands).(Enter your answers in thousands.)

	Base Case	20% Growth		5% Growth
INCOME STATEMENT
Revenue	$	10,000		$		$
Cost of goods sold		9,000
EBIT	$	1,000		$		$
Interest		200
Earnings before taxes	$	800		$		$
State and federal tax		320
Net income	$	480		$		$
Dividends		320
Retained earnings	$	160		$		$
BALANCE SHEET
Assets
Net working capital	$	1,000		$		$
Fixed assets		4,000
Total assets	$	5,000		$		$
Liabilities and shareholders' equity
Long-term debt	$	2,000		$		$
Shareholders' equity		3,000
Total liabilities and shareholders' equity	$	5,000		$		$
Required external financing				$		$

b.	Assume any required external funds will be raised by issuing long-term debt and that any surplus funds will be used to retire such debt. Prepare the completed (second-stage) pro forma balance sheet.(Enter your answers in thousands.)

BALANCE SHEET
	Base Case	20% Growth		5% Growth
Assets
Net working capital	$	1,000		$		$
Fixed assets		4,000
Total assets	$	5,000		$		$
Liabilities and shareholders' equity
Long-term debt	$	2,000		$		$
Shareholders' equity		3,000
Total liabilities and shareholders' equity	$	5,000		$		$