The most recent financial statements for Williamson, Inc., are shown here (assuming no income taxes): |
Income Statement | Balance Sheet | ||||||||||
Sales | $ | 8,600 | Assets | $ | 16,100 | Debt | $ | 6,400 | |||
Costs | 5,630 | Equity | 9,700 | ||||||||
Net income | $ | 2,970 | Total | $ | 16,100 | Total | $ | 16,100 | |||
Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year’s sales are projected to be $10,578. |
What is the external financing needed? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
External financing needed | $ |
Growth rate in sales=(10,578-8600)/8600=23%
Sales | 10,578 |
Costs(5630*1.23) | 6924.9 |
Net income | 3653.1 |
Total assets would be=$16100*1.23=$19803
Total equity would be=9700+3653.1
=13353.1
Total assets=Total equity+Total debt
Hence external financingn needed=$19803-13353.1-6400
=$50(Approx).
The most recent financial statements for Williamson, Inc., are shown here (assuming no income taxes): Income...
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