he 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales Costs EBIT Interest expense Taxable income Taxes (at 21%) Net income Dividends Addition to retained earnings Assets Current assets Cash Accounts receivable Inventories Total current assets Net plant and equipment Total assets $ 18,960 $ 44,240 BALANCE SHEET, YEAR-END, 2019 $ 6,000 11,000 33,000 $ 300,000 200,000 $ 100,000 20,000 $ 80,000 16,800 $ 63,200 $ 50,000 240,000 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 hat is the required external financing over the next year? ote: Enter excess cash as a negative number with a minus sign. $ 13,000 $ 13,000 200,000 15,000 62,000 $ 290,000 $ 290,00 ales and costs are projected to grow at 30% a year for at least the next 4 years. Both current assets and accounts payable are ojected to rise in proportion to sales. The firm is currently operating at 75% capacity, so it plans to Increase fixed assets in proportion sales. Interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout tio of 0.30.
he 2019 financial statements for Growth Industries are presented below. INCOME STATEMENT, 2019 Sales Costs EBIT Interest expense Taxable income Taxes (at 21%) Net income Dividends Addition to retained earnings Assets Current assets Cash Accounts receivable Inventories Total current assets Net plant and equipment Total assets $ 18,960 $ 44,240 BALANCE SHEET, YEAR-END, 2019 $ 6,000 11,000 33,000 $ 300,000 200,000 $ 100,000 20,000 $ 80,000 16,800 $ 63,200 $ 50,000 240,000 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 hat is the required external financing over the next year? ote: Enter excess cash as a negative number with a minus sign. $ 13,000 $ 13,000 200,000 15,000 62,000 $ 290,000 $ 290,00 ales and costs are projected to grow at 30% a year for at least the next 4 years. Both current assets and accounts payable are ojected to rise in proportion to sales. The firm is currently operating at 75% capacity, so it plans to Increase fixed assets in proportion sales. Interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout tio of 0.30.
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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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
Assets
Accounts receivable
Inventories
Total current assets
Net plant and equipment
Total assets
External financing
$ 18,960
$ 44,240
$ 6,000
11,000
BALANCE SHEET, YEAR-END, 2019
Current liabilities
Accounts payable
Total current liabilities
Long-term debt
33,000
$ 50,000
240,000
$ 300,000
200,000
$ 100,000
20,000
$ 290,000
$ 80,000
16,800
$ 63,200
Liabilities
Stockholders' equity
Common stock plus additional paid-in capital
Retained earnings
Total liabilities plus stockholders' equity
What is the required external financing over the next year?
Note: Enter excess cash as a negative number with a minus sign.
$ 13,000
$ 13,000
200,000
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 0.30.
15,000
62,000
$ 290,000
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