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Cleon's company has sales of $225,000, profit margin of 9%, total assets of $280,000, and total...

Cleon's company has sales of $225,000, profit margin of 9%, total assets of $280,000, and total equity of $210,000. The firm does not pay any dividends and does not plan to pay any dividends in the future. Currently, the firm is operating at 80% capacity. All costs vary directly with sales. The firm does not want to obtain any additional external equity. At the sustainable rate of growth, what will be the amount of debt on the firm’s pro-forma balance sheet? Will the firm raise new debt or repay debt? How much additional equity financing is required for next year?

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jeff jeffy answered 1 year ago
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