PLEASE HELP IN ANSWERING THE ATTACHED QUESTION, course: Financial decision making

Question Mammoth Builders Ltd financial statements for the financial year ended 30 June 2019, are given below. The company's revenues are projected to grow at a rate of 25 per cent in the 2019-20 financial year, and all financial statement accounts will vary directly with sales. Balance sheet Assets Liabilities and shareholders' equity Cash 3349239 Accounts payable $ 9041 679 Accounts receivable 5 830 754 Notes payables 4 857 496 Inventories 22 267 674 Total current assets $ 31 447 667 Total current liabilities $13 899 175 Net fixed assets 13 362 482 Long-term debt 29 731 406 Other assets 1 748 906 Ordinary shares 19 987 500 Retained earnings 12 940 974 Total assets $ 76 559 055 Total liabilities and equity $76 559 055 Income statement Revenues $193 212 500 Costs 145 265 625 EBITDA $ 47 946 875 Depreciation 23 318 750 EBIT $ 24 628 125 Interest 11 935 869 EBT $ 12 692 256 Tax (30%) 3 807 677 Profit $ 8884579 REQUIRED: (a) Based on the projected revenue growth of 25 per cent, develop a pro forma balance sheet and an income statement for the 2019-20 financial year. (2 +2 = 4 marks) (b) Assume now that equity accounts do not vary directly with sales but change when retained earnings change or new equity is issued. The company pays 75 per cent of its profit as dividends every year. In addition, the company plans to expand production capacity by acquiring additional equipment. This will cost the company $10 million. The company has no plans to issue new equity this year. Prepare a pro forma balance sheet using this information. Any funds that need to be raised (in addition to changes in current liabilities) will be in the form of long-term debt. (3 marks) (c) Based on the information in part (b), calculate: the External Financing Needed ii. the Internal Growth Rate iii. the Sustainable Growth Rate (1+1+1 = 3 marks)