Groff Graphics Company owns and operates a small chain of sportswear stores located near colleges and universities. Groff has experienced significant growth in recent years. The following data are available forGroff:

Groff Graphics Company
Consolidated Income Statement
(In thousands)
	Year ended December 31,
		2013		2012		2011
Sales		$53,322		$42,893		$35,526
Cost of goods sold		32,936		25,682		21,721
Gross margin		$20,386		$17,211		$13,805
Other income, net		397		439		421
		$20,783		$17,650		$14,226
Costs and Expenses:
Selling and administrative		$17,857		$14,665		$12,754
Interest		1,356		863		622
Total costs and expenses		$19,213		$15,528		$13,376
Income before income taxes		$ 1,570		$ 2,122		$ 850
Provision for income taxes		885		746		623
Net income		$ 685		$ 1,376		$ 227

Groff Graphics Company
Consolidated Balance Sheets
(In thousands)
	December 31,
ASSETS		2013		2012		2011
Current assets:
Cash	$	372	$	301	$	245
Accounts receivable		4,798		3,546		3,369
Inventories		5,673		4,521		3,389
Total current assets	$	10,843	$	8,368	$	7,003
Property, plant and equipment (net)		4,912		3,541		2,937
Other assets		592		592		552
Total assets		$16,347		$12,501		$10,492
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term notes payable	$	4,314	$	1,731	$	463
Accounts payable		1,256		987		783
Total current liabilities	$	5,570	$	2,718	$	1,246
Long-term debt		3,241		3,234		3,266
Total liabilities	$	8,811	$	5,952	$	4,512
Common stock & additional paid-in capital	$	4,367	$	4,598	$	4,725
Retained earnings		3,169		1,951		1,255
Total stockholders' equity	$	7,536	$	6,549	$	5,980
Total liabilities and stockholders' equity	$	16,347	$	12,501	$	10,492

Required:

1. Calculate how much Groff's sales, net income, and assets have grown during these 3 years. Round your answers to the nearest whole percent.

Sales	___________________%
Net income	___________________%
Assets	___________________%

2. How has Groff financed its asset growth? Enter "a", "b", or "c".

a) increase in retained earnings and a decrease in current liabilities.

b) increase in retained earnings and an increase in current liabilities.

c) increase in retained earnings and in increase in expenses.

3. Is Groff's liquidity is adequate? (yes/no)___________________

4. Why is interest expense growing? Enter "a", "b", or "c".

a) Because retained earnings is increasing.

b) Because short-term notes payable in increasings.

c) Because accounts payable is increasing.

Item 6

5. If Groff's sales grow by 25% in 2014, what would you expect net income to be? Round your answer to the nearest dollar. Use your answer in the following calculations. $___________________

6. If Groff's assets must grow by 25% to support the 25% sales increase and if 50% of net income is paid in dividends, how much capital must Groff raise in 2014? Round your answer to the nearest cent.

$___________________