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Last years financial statements for Knoll Consulting are below. Sales are expected to grow by 20 percent this year. Their tax rate and dividend payout ratio will be the same in the future Costs, selling and administration expense, current assets, accounts payable, and accrued taxes increase proportionally with sales Interest expense, notes payable, and long-term debt will be unchanged. Knoll is operating at 88 percent capacity Income Statement Last Year Sales 400,000 140,000 76,000 Costs of goods sold Selling and admin. expense Earnings before interest & taxes 184,000 48,000 136,000 34,000 102,000 Interest expense Earnings before taxes Balance Sheet Taxes Assets Liabilities and Owners Net income Equity Dividends 30,600 Cash 16,000 Accounts 12,000 Additions to retained earnings 71,400 payable Accounts receivable 64,000 Notes 20,000 payable 32,000 Accrued taxes payable Inventory 12,000Total current assets 112,000 Total current liabilities 44,000 Plant and 120,000 Long-termm debt 40,000 equipment Commorn stock 64,000 Retained 84,000 earnings Total ownerS equity 148,000 Total 232,000 Total liabilities & ownerS equity 232,000 assets What is the external financing needed? Round your answer to the nearest whole number and no commas Answer:

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2 Additional fund needed is computed as the excess of increase in assets over the increase in liabilities and increase in retained earnin 4 Required increase in assets 5 Less: 6 Increase in liabilites 7 Increase in retained earnings 8 Additional Fund needed 72640 Last year Projected 400000 560000 140000 196000 76000 106400 184000 257600 Sales Cost Selling and admin EBIT Interest exp Taxable income Tax Net income Dividends Addition to retained earnings 9600 110040 -47000 10 Required increase in assets 11 Increase in current assets 12 Increase in Fixed assets 13 14 Increase in liabilites 15 Increase in current liabilites 136000 209600 34000 52400 102000 157200 30600 47160 71400 110040 27840 72640 9600 9600 17 Increase in fixed assets 18 Sales at full capacity 19 Fixed assets requried 454545.5 1478402 Additional fund needed is computed as the excess of increase in asset 4 Required increase in assets 5 Less:- 6 Increase in liabilites 7 Increase in retained eamings 8 Additional Fund needed Last year 400000 140000 76000 -F6-F7-F8 48000 -F9-F10 34000 -F11-F12 30600 -F13-F14 Projected af6 14096 -C16 -G15 -C4-C6-C7 Sales 10 Required increase in assets 11 Increase in current assets 12 Increase in Fixed assets 13 14 Increase in liabilites 15 Increase in current liabilites 16 17 Increase in fixed assets 18 Sales at full capacity 19 Fixed assets requried Selling and admin EBIT Interest exp Taxable income Tax Net income Dividends Addition to retained earnings F7140% -F8 140% -G6-G7-G8 48000 G9-G10 -F12 G11/F11 -G11-G12 F14 G13/F13 -G13-G14 -112000-4096 -C19-120000 :SUM (C11:C12) -(44000-20000)40% -SUM(C15:C15) 400000/0.88

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