The 2022 partical financial statements of XYZ Inc. are shown below. Complete the 2022 financial statements and forecast XYZ's 2023 income statement and balance sheet. Using the following assumption: (1) The retained earnings for 2021 is $1000. (Hint: this assumption decides the Retained Earning for 2022) (2) The current operating capacity is 78%. (Hint: this assumption decides the net fixed asset for 2023) (3) Sales is expected to grow 25% from 2022 to 2023. (4) Depreciation is expected to growth 5% from 2022 to 2023. (Hint: this assumption decides the depreciation for 2023) (5) Interest expense, short-term debt, long-term debt and common stock remain the same in 2023 as in 2022. (6) XYZ Inc. will not issue any new stock or pay out special dividends. (7) The tax rate is 25% Question 1: Complete the 2022 financial statements, and use the percentage of sales methods to forecast the financial statements for 2023. Then calculate the External Financing Needed (EFN) Income Statement (December 31, in millions of dollars) Net Sales Expenses (excluding depreciation) Depreciation EBIT Interest Expense Taxable Income Taxes Net Income Actual Forecast 2022 2023 6400 4096 35 Dividends 186 Additions to Retained Earning 880 Balance Sheets (December 31, in millions of dollars) Actual Forecast 2022 2023 Assets: Cash 112 Account Receivable 396 Inventory 743 Total current assets 1251 Fixed assets, net 1860 Total assets 3111 Liabilities and equity: Account payable Accruals 200 374 Short-term debt 120 Total current liabilities 694 Long-term debt 420 Total liabilities 1114 Common stock Retained Earnings Total common equity Total liabilities and equity External Financing Needed (EFN) Question 2: Based on the forecast balance sheet in 2023, will XYZ Inc. need external financing? If so, how will XYZ Inc. raise the funding? If not, what will XYZ Inc. do? Question 3: Using the financial statements for 2022 and 2023, calculate operating cash flow, change in net working capital, net capital spending, and free cash flow for 2023 Operating cash flow Change in net working capital Net capital spending Free cash flow