Problem 4-5 EFN [LO2]The most recent financial statements for Assouad, Incorporated, are shown here:Income Statement$Sales10,700Costs7,600Taxable income $3,100Taxes (24%)744Net income $ 2,356External financing neededBalance SheetCurrent assets $5,10010,000Fixed assetsTotalCurrent liabilitiesLong-term debtEquity$ 15,100 Total$ 3,1504,6807,270$ 15,100Assets, costs, and current liabilities are proportional to sales. Long-term debt and equityare not. The company maintains a constant 44 percent dividend payout ratio. As withevery other firm in its industry, next year's sales are projected to increase by exactly 15percent. What is the external financing needed? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g., 32.16.)

For growth in sales and profits a company needs to invest in assets that require external funding if…

he most recent financial statements for Assouad, Incorporated, are shown here: Income Statement $ Sales 10,700 Costs 7,600 Taxable income $3,100 Taxes (24%) 744 Net income $2,356 Balance Sheet Current assets $5,100 Fixed assets 10,000 Total $ 15,100 Current liabilities Long-term debt Equity Total $3,150 4,680 7,270 $ 15,100

he most recent financial statements for Assouad, Incorporated, are shown here: Income Statement $ Sales 10,700 Costs 7,600 Taxable income $3,100 Taxes (24%) 744 Net income $2,356 Balance Sheet Current assets $5,100 Fixed assets 10,000 Total $ 15,100 Current liabilities Long-term debt Equity Total $3,150 4,680 7,270 $ 15,100

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter12: Capital Structure

Section: Chapter Questions

Problem 1PROB

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