Question 6 (9 points) Problem 1 (9 Marks) Lothbrok Industries expects to reach a sales level of $324 million for next year. The company expects to continue paying the same dividend per share for the next several years. a. Calculate the additional financing, if any, the firm will need over the next year in order to achieve sales of $324 million. Assume all assets vary with sales, all ratios remain constant and that any debt or borrowing is non-spontaneous financing. (4 marks) Income Statement (Millions CDN) Revenue Cost Of Goods Sold Gross Profit Selling General & Admin Exp. Depreciation & Amortization. Operating Income Interest Expense Earnings Before Tax Income Tax Expense Net Income 2020 270 154 116 74 11 32 6 26 8 18 Per Share Items EPS Common Shares Outstanding (millions) W Dividends per Share Payout Ratio % $0.40 44.1 $0.15 36.9% 2019 2020 Balance Sheet, (millions CDN) ASSETS Cash And Equivalents Accounts Receivable Inventory Prepaid Exp. Total Current Assets Gross Property, Plant & Equipment Accumulated Depreciation Net Property, Plant & Equipment Other Non-operating Assets Total Assets 21 115 3 140 230 (88.3) 142 50 332 21 120 4 145 244 (86) 158 52 355 25 26 LIABILITIES Accounts Payable Accrued Exp. Short-term Borrowings Other Current Liabilities Total Current Liabilities Long-Term Debt Other Non-Current Liabilities 27 10 71 76 18 37 14 76 70 29 A