The 2019 financial statements for Growth Industries are presented below. Sales Costs EBIT Interest expense Taxable income Taxes (at 21%) Net income INCOME STATEMENT,

Question

32 users unlocked this solution today!

The 2019 financial statements for Growth Industries are presented below. Sales Costs EBIT Interest expense Taxable income Taxes (at 21%) Net income INCOME STATEMENT, 2019 Dividends $ 34,760 Addition to retained earnings $ 34,760 $ 320,000 210,000 $ 110,000 22,000 $ 88,000 18,480 $ 69,520 Cash Assets Current assets Accounts receivable Inventories BALANCE SHEET, YEAR-END, 2019 Current liabilities Accounts payable Liabilities Total current liabilities Stockholders' equity $ 8,000 13,000 39,000 Long-term debt Total current assets Net plant and equipment $ 60,000 260,000 Total assets $ 320,000 Common stock plus additional paid-in capital Retained earnings Total liabilities plus stockholders' equity $ 15,000 $ 15,000 220,000 15,000 70,000 $ 320,000 Sales and costs are projected to grow at 20% a year for at least the next 4 years. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at 75% capacity, so it plans to increase fixed assets in proportion to sales. Interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of 0.50. What is the required external financing over the next year? Note: Enter excess cash as a negative number with a minus sign.