![Problem 4-3 Calculating EFN [LO2] The most recent financial statements for Hornick, Inc., are shown here (assuming no income taxes): Income Statement Sales Costs Balance Sheet 6,150 quity 13,200 S 6,800 Assets $19,350 Debt 4,750 Net income S 2,050 Tot$19,350 Total $19,350 sales are projected to be $8,024. What is the external financing needed? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) External financing needed](http://img.homeworklib.com/questions/43f84930-7355-11ea-8d7d-77385331450d.png?x-oss-process=image/resize,w_560)
Homework Answers
Answer:
Given that:
Assets and costs are proportionate to sale. Debt and equity are not. No dividends are paid.
Hence:
External Financing needed (EFN) = (Assets / Sales ) x (Projected Sales - Sales) - (Net income / sales x Projected Sales
= (19350 / 6800) * (8024 - 6800) - ((2050 /6800) * 8024)
= $1,064.00
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Problem 4-3 Calculating EFN [LO2] The most recent financial statements for Hornick, Inc., are shown here...
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