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The 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales $ 340,000 Costs 220.000 EBIT $ 120,000 Interest expense 24.000 Taxable
The 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales $ 340,000 Costs 220.000 EBIT $ 120,000 Interest expense 24.000 Taxable income $ 96.000 Taxes (at 21%) 20.160 Net income $ 75,840 Dividends $ 22.752 Addition to retained earnings $ 53.088 Assets $ S Current assets Cash Accounts receivable Inventories Total current assets Net plant and equipment BALANCE SHEET, YEAR-END, 2019 Liabilities Current liabilities 3,000 Accounts payable 8,000 Total current liabilities 29,000 Long-term debt $ 40,000 Stockholders' equity 280,000 Common stock plus additional paid-in capital Retained earnings $ 320,000 Total liabilities plus stockholders' equity 10,000 10.000 240,000 15,000 55.000 $ 320,000 Total assets Sales and costs are projected to grow at 40% 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 70% 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 0.30. What is the required extemal financing over the next year? (Enter excess cash as a negative number with a minus sign.) External financing
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