Question

The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Sales Costs Balance Sheet $29,000 Assets $69,200 Debt $33,200 Equity 36,000 18,150 Taxable $10,850 Total $69,200 Total $69,200 income : Taxes (22%) 2,387 Net $8,463 income Assets and costs are proportional to sales. Debt and equity are not. A dividend of $3,200 was paid, and the company wishes to maintain a constant payout ratio. Next years sales are projected to be $33,060 What is the external financing needed? (Do not round intermediate calculations.) External financing needed

I would appreciate a good explanation thanks.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Growth rate in sales=(33060-29000)/29000=14%

Dividend payout ratio=Dividend/Net income

=(3200/8463)=0.378116507

Sales 33060
Costs(18150*1.14) 20691
Taxable income $12369
Taxes(22%*$12369) $2721.18
Net income $9647.82
Less:dividends($9647.82*0.378116507) $3648
Addition to retained earnings $5999.82

Total assets would be=$69200*1.14=$78,888

Total equity would be=$36000+Addition to retained earnings

=$36000+$5999.82

=$41,999.82

Total assets=Total equity +Total liabilities

Hence external financing needed=$78,888-$41,999.82-$33200

=$3688.18

Add a comment
Know the answer?
Add Answer to:
I would appreciate a good explanation thanks. The most recent financial statements for Cardinal, Inc., are...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Sales Costs Balance...

    The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Sales Costs Balance Sheet $29,800 Assets $70,800 Debt $34,600 Equity 36,200 18,250 Taxable 11,550 Tota $70,800 Total $70,800 income Taxes (22%) 2,541 Net income $9,009 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $3,400 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be $33,972 What is the external financing needed?...

  • The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Sales Costs Balance...

    The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Sales Costs Balance Sheet $29,800 Assets $70,800 Debt $34,600 Equity 36,200 18,250 $11,550 Total $70,800 Total $70,800 income Taxes (22%) 2541 Net income $ 9,009 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $3,400 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be $33,972. What is the external financing needed?...

  • 2 The most recent financial statements for Cardinal, Inc, are shown here: 10 points Sales Costs...

    2 The most recent financial statements for Cardinal, Inc, are shown here: 10 points Sales Costs $25,400 Assets $61,000 Debt$26,900 Equity 34,100 17,300 Taxable s $8,100 Total$61,000 Total $61,000 Income Hint Taxes (21%) 1701 Print Net Income$ 6,399 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $2.100 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be $29,210 What is the external financing needed?...

  • 2 The most recent financial statements for Cardinal, Inc, are shown here: Sales Costs $25,400Assets $61,000...

    2 The most recent financial statements for Cardinal, Inc, are shown here: Sales Costs $25,400Assets $61,000 Debt $26.,900 Equity 34,100 10 17300 Taxable s $ 8100 Total $61.000 Total $61000 Taxes (21%) 1701 Net income$ 6.399 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $2100 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales Reterences ill are projected to be $29.210. What is the external financing needed?...

  • 4. EFN [LO2] The most recent financial statements for Cardinal, Inc., are shown here: Income Statement...

    4. EFN [LO2] The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Sales $25,400 Assets Costs 17,300 Taxable income $ 8,100 Total Taxes (21%) 1,701 Net income $ 6,399 Balance Sheet $61,000 Debt Equity $61,000 Total $26,900 34,100 $61,000 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $2,100 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be $29,210. What...

  • The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Balance Sheet   Sales...

    The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Balance Sheet   Sales $ 31,400   Assets $ 74,000   Debt $ 37,400   Costs 18,450   Equity 36,600   Taxable income $ 12,950     Total $ 74,000     Total $ 74,000   Taxes (24%) 3,108     Net income $ 9,842 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $3,800 was paid, and the company wishes to maintain a constant payout ratio. Next year’s sales are projected to be...

  • The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Balance Sheet   Sales...

    The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Balance Sheet   Sales $ 33,000   Assets $ 77,200   Debt $ 40,200   Costs 18,650   Equity 37,000   Taxable income $ 14,350     Total $ 77,200     Total $ 77,200   Taxes (24%) 3,444     Net income $ 10,906 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $4,200 was paid, and the company wishes to maintain a constant payout ratio. Next year’s sales are projected to be...

  • The most recent financial statements for Heine, Inc., are shown here:    Income Statement Balance Sheet...

    The most recent financial statements for Heine, Inc., are shown here:    Income Statement Balance Sheet   Sales $ 30,000   Assets $ 56,100   Debt $ 20,500   Costs 22,000   Equity 35,600   Taxable income $ 8,000   Total $ 56,100   Total $ 56,100   Taxes (40%) 3,200       Net income $ 4,800       Assets and costs are proportional to sales. Debt and equity are not. A dividend of $2,200 was paid, and the company wishes to maintain a constant payout ratio. Next year’s...

  • the most recent financial statements for reply Question 2 (of 10) value: 10.00 points The most...

    the most recent financial statements for reply Question 2 (of 10) value: 10.00 points The most recent financial statements for Reply, Inc., are shown here: Income Statement Sales Costs ance $ 30,000 Assets $55,900 Debt $ 22,300 Equity 33,600 22,000 Taxable income $ 8,000 Taxes (40%) 3,200 Net income 4,800 Total $55,900 Total$55,900 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $2,300 was paid, and the company wishes to maintain a constant payout...

  • REFER The most recent financial statements for Reply, Inc., are shown here: oneet Income Statement Sales...

    REFER The most recent financial statements for Reply, Inc., are shown here: oneet Income Statement Sales $ 23,700 Costs 14.400 Assets Balance Sheet $ 55,200 Debt Equity $20,400 34,800 Taxable income $ 9,300 Total $ 55,200 Total $55,200 Taxes (40%) 3,720 Net income $ 5,580 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,800 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT