Question
Given the financial statements below for Dragonfly Enterprises, what is the external financing need for a pro forma increase in sales of 18% if the
Given the financial statements below for Dragonfly Enterprises, what is the external financing need for a pro forma increase in sales of 18% if the firm is operating at 90% capacity? Enter your answer as the nearest whole (e.g., 123), but do not include the $ sign.
Dragonfly Enterprises |
|
|
Income Statement ($ Million) |
| 2011 |
|
|
|
Sales |
| 370 |
Cost of Goods Sold |
| 226 |
Selling, General, & Admin Exp. |
| 62 |
Depreciation |
| 20 |
Earnings Before Interest & Taxes |
| 62 |
Interest Expense |
| 12 |
Taxable Income |
| 50 |
Taxes at 40% |
| 20 |
Net Income |
| 30 |
Dividends |
| 9 |
Addition to Retained Earnings |
| 21 |
|
|
|
Balance Sheets as of 12-31 |
|
|
Assets | 2010 | 2011 |
Cash | 10 | 10 |
Account Receivable | 46 | 50 |
Inventory | 43 | 45 |
Total Current Assets | 99 | 105 |
Net Fixed Assets | 166 | 195 |
Total Assets | 265 | 300 |
|
|
|
Liabilities and Owners Equity | 2010 | 2011 |
Accounts Payable | 26 | 30 |
Notes Payable | 0 | 0 |
Total Current Liabilities | 26 | 30 |
Long-Term Debt | 140 | 150 |
Common Stock | 22 | 22 |
Retained Earnings | 77 | 98 |
Total Liab. and Owners Equity | 265 | 300 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started