Finance 3400 Exam 2 Practice Problems Using the following income statement and balance sheet, create a pro-forma income statement and balance sheet Assume a growth rate of 30%, and that the tax rate and dividend payout remain constant. Costs, assets, and accounts payable vary with sales, but the others do not, and the company is operating at 100% capacity. Use this information to answer the first 5 questions PARROTHEAD ENTERPRISES Income Statement Sales 52.000 Costs 41,080 Taxable income S 10,920 Taxes $ 3,494 Net Income s 7,426 Dividends $ 2,599 Addition to Retained Earnings $ 4,827 PARROTHEAD ENTERPRISES Balance Sheet Current Assets Current abilities Cash $3,250 A/P $ 2,850 A/R $ 4,775 N/P S 7,200 Invetory $ 8,300 Total $ 20.050 Total $ 16,325 Long Term Debt $ 31,500 Owner's Equity Fixed Assets Common Stock $ 17,850 Net Plant & Equip $ 48,625 Retained Earnings $ 5,550 Total $ 23,400 TOTAL ASSETS $ 64,950 TOTAL LAB & EQUITY $ 64,950 1. What is the proforma value for retained earnings? ($11,825) 2. What is the external financing needed? ($12,355) 3. Based on the proforma values, calculate the internal growth rate (8.03%) 4. Based on the proforma values, calculate the sustainable growth rate (268229 5- Suppose Parrothead Enterprises is operating at 90%, rather than 100% capacity 2. What is the value for full capacity sales? ($57,778)