Executive Fruits financial manager believes that sales in 2015 could rise by as much as 20% or by as little as 10%. 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		10% Growth
INCOME STATEMENT
Revenue	$	10,500		$		$
Cost of goods sold		9,450
EBIT	$	1,050		$		$
Interest		210
Earnings before taxes	$	840		$		$
State and federal tax		336
Net income	$	504		$		$
Dividends		336
Retained earnings	$	168		$		$
BALANCE SHEET
Assets
Net working capital	$	1,050		$		$
Fixed assets		4,200
Total assets	$	5,250		$		$
Liabilities and shareholders' equity
Long-term debt	$	2,100		$		$
Shareholders' equity		3,150
Total liabilities and shareholders' equity	$	5,250		$		$
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		10% Growth
Assets
Net working capital	$	1,050		$		$
Fixed assets		4,200
Total assets	$	5,250		$		$
Liabilities and shareholders' equity
Long-term debt	$	2,100		$		$
Shareholders' equity		3,150
Total liabilities and shareholders' equity	$	5,250		$		$