The most recent financial statements for Assouad, Inc., are shown here:     Income Statement Balance Sheet   Sales $3,500     Current assets $4,000     Current liabilities $970     Costs 2,500     Fixed assets 6,200     Long-term debt 3,500     Taxable income $1,000         Equity 5,730     Taxes (25%) 250       Total $10,200       Total $10,200       Net income $750               Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 50 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 20 percent.

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
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The most recent financial statements for Assouad, Inc., are shown here:

 

  Income Statement Balance Sheet
  Sales $3,500     Current assets $4,000     Current liabilities $970  
  Costs

2,500  

  Fixed assets 6,200     Long-term debt 3,500  
  Taxable income $1,000         Equity 5,730  
  Taxes (25%) 250       Total

$10,200  

    Total

$10,200  

    Net income

$750  

       
 
 

Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 50 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 20 percent.

 

What is the external financing needed?

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