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The most recent financial statements for Fleury Inc., follow. Sales for next year are projected to grow by 22 percent. Interest expense will remain constant;
The most recent financial statements for Fleury Inc., follow. Sales for next year are projected to grow by 22 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets and accounts payable increase spontaneously with sales.
FLEURY, INC. | ||
Income Statement | ||
Sales | $ | 573092 |
Costs | 507669 | |
Other expenses | 10908 | |
Earnings before interest and taxes | $ | ? |
Interest paid | 13967 | |
Taxable income | $ | ? |
Taxes (30%) | ? | |
Net income | ? | |
Dividends | $ | 8316 |
FLEURY, INC. | ||||||
Balance Sheet | ||||||
Assets | Liabilities and Owners Equity | |||||
Current assets | Current liabilities | |||||
Cash | $ | 22608 | Accounts payable | $ | 51034 | |
Accounts receivable | 39842 | Notes payable | 17061 | |||
Inventory | 70054 | |||||
Long-term debt | $ | 118838 | ||||
Fixed assets | ||||||
Net plant and equipment | $ | 444760 | Owners equity | |||
Common stock and paid-in surplus | $ | 124367 | ||||
Retained earnings | ? |
If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 22 percent growth rate in sales?
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