The most recent financial statements for Assouad, Incorporated, are shown here:Balance SheetIncome StatementSalesCostsTaxable incomeTaxes (25%)$ 9,600 Current assets6,200 Fixed assets$ 3,400850$ 4,200 Current liabilities10,400 Long-term debtEquity$ 1,9003,8008,900Total$ 14,600Total$ 14,600Net income$ 2,550Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 40percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 15 percent.What is the external financing needed?Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.External financing needed

Step 1: Calculate the increase in sales:Current sales: $9,600Projected sales increase: 15%Increase…

Answered: The most recent financial statements…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 89E: Ratio Analysis Rising Stars Academy provided the following information on its 2019 balance sheet and...

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