Question

Given the financial statements below for Dragonfly Enterprises, what is the external financing need for a pro forma increase in sales of 18% if the company is operating at 90% capacity? Enter your answer as the nearest whole (e.g., 123), but do not include the $ sign. Dragonfly Enterprises Income Statement ($ Million) 2011 Sales 370 Cost of Goods Sold 226 Selling, Gen & Admin Exp 62 Depreciation 20 Earnings Before Int & Tax 62 Interest Expense 12 Taxable Income 50 Taxes at 40% 20 Net Income 30 Dividends 9 Addition to Retained Earn. 21 Balance Sheets as of 12-31 Assets 2010 2011 Cash 10 10 Account Receivable 46 50 Inventory 43 45 Total Current Assets 99 105 Net Fixed Assets 166 195 Total Assets 265 300 Liabilities and Owners Equity 2010 2011 Accounts Payable 26 30 Notes Payable 0 0 Total Current Liabilities 26 30 Long-Term Debt 140 150 Common Stock 22 22 Retained Earnings 77 98 Total Liab. and Owners Eq 265 300

Answer 1

Income Statement
Year	2010	2011	2012
Sales		370	436.6
COGS		226	266.68
SG&A		62	73.16
Depre		20	23.5
EBIT		62	73.26
Int		12	14.25
EBT		50	59.01
Tax (40%)		20	23.604
PAT		30	35.406
Dividend		9	9
Retained Earning		21	26.406
Balance Sheet
Year	2010	2011	2012
Cash	10	10	18.706
Acc Receivable	46	50	59
Inventory	43	45	53.1
Total Current Asset	99	105	130.806
Net Fixed Asset	166	195	229.125
Total Asset	265	300	359.931
Common Stock	22	22	22
Retained Earning	77	98	124.406
Liabilities & Owner's Equity	99	120	146.406
Acc Payable	26	30	35.4
Notes Payable	0	0	0
Total Current Liability	26	30	35.4
Long term Debt	140	150	178.125	28.125
Total Liablities	265	300	359.931

From Above Data I found that Dragonfly Enterprises require 28.125 external financing.