Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 45 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 16 percent. What is the external financing needed? (Do not round intermediate
Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 45 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 16 percent. What is the external financing needed? (Do not round intermediate
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
Problem 1PS
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The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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![Problem 4-5 EFN [LO2]
The most recent financial statements for Assouad, Incorporated, are shown here:
Income Statement
Balance Sheet
Sales
Costs
$ 8,500 Current assets $3,450 Current liabilities
5,950 Fixed assets
$ 2,325
8,900
Long-term debt
3,910
Taxable income $2,550
Equity
6,115
$
$
Taxes (22%)
561
Total
Total
12,350
12,350
Net income
$1,989
Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity
are not. The company maintains a constant 45 percent dividend payout ratio. As with
every other firm in its industry, next year's sales are projected to increase by exactly 16
percent. What is the external financing needed? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
External financing needed](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb67374be-bcfa-44c5-8f74-6eaf46e1a0d1%2Fba9759b5-b687-46f4-a720-d347e0735e36%2Fujbvoo_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 4-5 EFN [LO2]
The most recent financial statements for Assouad, Incorporated, are shown here:
Income Statement
Balance Sheet
Sales
Costs
$ 8,500 Current assets $3,450 Current liabilities
5,950 Fixed assets
$ 2,325
8,900
Long-term debt
3,910
Taxable income $2,550
Equity
6,115
$
$
Taxes (22%)
561
Total
Total
12,350
12,350
Net income
$1,989
Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity
are not. The company maintains a constant 45 percent dividend payout ratio. As with
every other firm in its industry, next year's sales are projected to increase by exactly 16
percent. What is the external financing needed? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
External financing needed
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