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Calculate the external financing needed

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Reference no: EM131572825

The Optical Scam Company has forecast a sales growth rate of 20 percent for next year. The current financial statements are shown here: Income statement Sales $ 31,800,000 Costs 27,003,300 Taxable income 4,796,700 Taxes 1,678,845 Net income 3,117,855 Dividends 1,247,142 Addition to retained earnings 1,870,713 Balance Sheet Current Assets 7,340,000 Fixed Assets 19,372,000 Total Assets 26,712,000 Short term debt 5,088,000 long term debt 2,345,250 Common Stock 5,924,750 Accum Ret. Earnings 13,354,000 Total Equity 19,278,750 Total Liab. and Equity 26,712,000 a. Calculate the external financing needed for next year. b-1. Prepare the firm’s pro forma balance sheet for next year b-2. Calculate the external financing needed c. Calculate the sustainable growth rate for the company based on the current financial statements.

Reference no: EM131572825

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