Current liabilities are proportional to sales

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Reference no: EM131188059

The most recent financial statements for Summer Tyme, Inc., are shown here: Income Statement Balance Sheet Sales $4,100 Current assets $4,900 Current liabilities $890 Costs 2,500 Fixed assets 6,000 Long-term debt 3,590 Taxable income $1,600 Equity 6,420 Taxes (32%) 512 Total $10,900 Total $10,900 Net income $1,088 Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 60 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 25 percent. Required: What is the external financing needed? (Do not round your intermediate calculations.)

Reference no: EM131188059

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