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The most recent financial statements for Fleury Inc., follow. Sales for 2015 are projected

The most recent financial statements for Fleury Inc., follow. Sales for 2015 are projected

The most recent financial statements for Fleury Inc., follow. Sales for 2015 are projected to grow by 25 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets and accounts payable increase spontaneously with sales.

If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 25 percent growth rate in sales? (Do not round intermediate calculations.)

FLEURY, INC.

2014 Income Statement

  Sales

 

 

 

$

745,000

 

  Costs

 

 

 

 

580,000

 

  Other expenses

 

 

 

 

16,000

 

 

 

 

 

 

 

 

  Earnings before interest and taxes

 

 

 

$

149,000

 

  Interest paid

 

 

 

 

12,000

 

 

 

 

 

 

 

 

  Taxable income

 

 

 

$

137,000

 

  Taxes (20%)

 

 

 

 

27,400

 

 

 

 

 

 

 

 

  Net income

 

 

 

$

109,600

 

 

 

 

 

 

 

 

  Dividends

$

21,920

 

 

 

 

  Addition to retained earnings

 

87,680

Abhinav 02-Dec-2019

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