Question
Sales are projected to increase 25%. The dividend payout ratio is expected to remain constant and the company is operating at full capacity. Prepare the
Sales are projected to increase 25%. The dividend payout ratio is expected to remain constant and the company is operating at full capacity. Prepare the current and pro forma income statements and balance sheets to:
1. Calculate how much external financing is needed, if any.
2. Using the information, calculate the sustainable growth rate.(Enter as a whole percentage without the % sign)
Accounts Payable | $6,000 | Accounts Receivable | $5,000 | Cash | $3,000 |
Common Stock | $13,000 | Costs | $17,000 | Fixed Assets | $30,000 |
Inventory | $7,000 | Long-Term Debt | $15,000 | Notes Payable | $3,000 |
Retained Earnings | $8,000 | Sales | $20,000 |
|
|
Tax Rate | 34% | Dividend Payout Ratio | 40% |
|
|
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