SCOTT, INC. 2019 Income Statement Sales Costs Other expenses 31,000 Earnings before interest and taxes $134,000 Interest expense 27,000 Taxable income $107,000 Taxes (22\%) 23,540 We are told that sales will increase by 30% next year. Derive the Pro-forma Income Statement for Scott, Inc. In doing so, assume that sales, costs, and other expenses are proportional to sales, while the interest expense is not. Also, by assuming that the firm has a constant dividend payout ratio, compute the Pro-forma dividend amounts and the Pro-forma additions to retained earnings. Show all your calculations below. Balance Sheet as of Deremher 31 2010 Using the information provided in Question (14) and the Balance Sheet information as of December 31,2019 , derive the Proforma Balance Sheet for Scott, Inc. In doing so, assume that total assets and accounts payable change proportionally to sales, total equity changes only because of the change in the additions to retained earnings, while all other items remain constant. Show all your steps. Using the 2019 Income Statement and Balance Sheet information provided in Questions (14) and (15), compute the sustainable growth rate for Scott, Inc. Edit Table Assume that firm's sales grow at the sustainable growth rate. Which items from the firm's balance sheet you will need to "change" to compute the external financing needed? Note, I am not looking for the calculation of the external financing needed, but I simply want a list of items from the balance sheet that you will need to use to get the external financing needed