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2019 financial statements for Growth Industries are presented below. ales Costs BIT INCOME STATEMENT, 2019 Interest expense axable income axes (at 21%) let income Dividends Addition to retained earnings Current assets Cash Assets Accounts receivable Inventories Total current assets et plant and equipment $ $ 43,608 $ 29,072 9,000 14,000 37,000 $ 330,000 215,000 $ 60,000 270,000 $ $ $ 115,000 23,000 BALANCE SHEET, YEAR-END, 2019 92,000 19,320 72,680 Current liabilities Accounts payable Liabilities Total current liabilities Long-term debt Stockholders' equity Common stock plus additional paid-in capital $ 16,000 $ 16,000 230,000 15,000

2019 financial statements for Growth Industries are presented below. ales Costs BIT INCOME STATEMENT, 2019 Interest expense axable income axes (at 21%) let income Dividends Addition to retained earnings Current assets Cash Assets Accounts receivable Inventories Total current assets et plant and equipment $ $ 43,608 $ 29,072 9,000 14,000 37,000 $ 330,000 215,000 $ 60,000 270,000 $ $ $ 115,000 23,000 BALANCE SHEET, YEAR-END, 2019 92,000 19,320 72,680 Current liabilities Accounts payable Liabilities Total current liabilities Long-term debt Stockholders' equity Common stock plus additional paid-in capital $ 16,000 $ 16,000 230,000 15,000

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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The 2019 financial statements for Growth Industries are presented below. Sales Costs EBIT Interest expense Taxable income Taxes (at 21%) Net income Dividends Addition to retained earnings Current assets Cash INCOME STATEMENT, 2019 Total assets Accounts receivable Inventories Total current assets Net plant and equipment Assets External financing $ $43,608 $ 29,072 9,000 14,000 37,000 $ 60,000 270,000 $ 330,000 215,000 $ 330,000 $ 115,000 23,000 $ BALANCE SHEET, YEAR-END, 2019 $ 92,000 19,320 72,680 Liabilities Current liabilities Accounts payable Total current liabilities Long-term debt Stockholders' equity Common stock plus additional paid-in capital Retained earnings Total liabilities plus stockholders' equity $ $ 16,000 16,000 230,000 15,000 69,000 $ 330,000 Sales and costs are projected to grow at 30% 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 0.60. What is the required external financing over the next year? (Enter excess cash as a negative number with a minus sign.)
Transcribed Image Text:The 2019 financial statements for Growth Industries are presented below. Sales Costs EBIT Interest expense Taxable income Taxes (at 21%) Net income Dividends Addition to retained earnings Current assets Cash INCOME STATEMENT, 2019 Total assets Accounts receivable Inventories Total current assets Net plant and equipment Assets External financing $ $43,608 $ 29,072 9,000 14,000 37,000 $ 60,000 270,000 $ 330,000 215,000 $ 330,000 $ 115,000 23,000 $ BALANCE SHEET, YEAR-END, 2019 $ 92,000 19,320 72,680 Liabilities Current liabilities Accounts payable Total current liabilities Long-term debt Stockholders' equity Common stock plus additional paid-in capital Retained earnings Total liabilities plus stockholders' equity $ $ 16,000 16,000 230,000 15,000 69,000 $ 330,000 Sales and costs are projected to grow at 30% 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 0.60. What is the required external financing over the next year? (Enter excess cash as a negative number with a minus sign.)
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