Refer to the financial information provided for Dilworth Inc. below (focus on the 2019 information). Use ONLY the direct method to estimate Dilworths EFN for 2020. The expected growth in sales for 2020 is 10%.

(A) Assume that the firm is operating at full capacity utilization currently. (15 points)

(B) Assume that the firm is operating at 90% capacity utilization currently. (5 points)

Dilworth Inc 2018 2019 2018 2019

31-Dec 31-Dec 31-Dec 31-Dec

Cash $13,320 $14,306 Accounts Payable $9,504 $10,512

Accounts Receivable 18,994 21,099 Accrued Wages 14,508 16,466

Inventory 13,794 22,754 Current Liabilities $24,012 $26,978

Current Assets $46,108 $58,159 Long Term Debt $136,800 $152,000

Net Fixed Assets $344,426 $406,311 Owners' Equity $229,722 $285,492

Total Assets $390,534 $464,470 Total Liab.& Eq. $390,534 $464,470

2019

Sales $565,200

Cost of goods sold 274,025

Selling & Admin 124,733

Depreciation 54,576

EBIT $111,866

Interest 19,296

EBT 92,570

Taxes @25% 23,143

Net Income $69,428

Dividends $19,600