Reference no: EM132459184

The 2019 financial statements for Growth Industries are presented below.

INCOME STATEMENT, 2019

Sales   $380,000 

Costs    240,000 

EBIT   $140,000

 Interest expense    28,000 

Taxable income   $112,000 

Taxes (at 21%)    23,520 

Net income   $88,480

 Dividends $26,544   

 Addition to retained earnings $61,936

BALANCE SHEET, YEAR-END, 2019

 Assets     Liabilities   

Current assets     Current liabilities   

Cash $7,000   Accounts payable$14,000 

Accounts receivable 12,000   Total current liabilities$14,000

 Inventories 31,000   Long-term debt 280,000 

Total current assets$50,000   Stockholders' equity   

Net plant and equipment 320,000   Common stock plus additional paid-in capital 15,000 Retained earnings 61,000 

Total assets$370,000   Total liabilities plus stockholders' equity$370,000 

Sales and costs are projected to grow at 20% a year for at least the next 4 years. Both current assets and accounts payable are projected to rise in proportion to sales. The firm is currently operating at 75% capacity, so it plans to increase fixed assets in proportion to sales. Interest expense will equal 10% of long-term debt outstanding at the start of the year. The firm will maintain a dividend payout ratio of 0.30.

What is the required external financing over the next year? (Enter excess cash as a negative number with a minus sign.)