Question

The most recent financial statements for Fleury Inc., follow. Sales for next year 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.

FLEURY, INC.
Income Statement
Sales	$	579737
Costs		505025
Other expenses		19161
Earnings before interest and taxes	$	?
Interest paid		14830
Taxable income	$	?
Taxes (30%)		?
Net income		?
Dividends	$	7822

FLEURY, INC.
Balance Sheet
Assets				Liabilities and Owners’ Equity
Current assets				Current liabilities
Cash	$	22972		Accounts payable	$	52453
Accounts receivable		37529		Notes payable		18963
Inventory		70077
				Long-term debt	$	108462
Fixed assets
Net plant and equipment	$	440703		Owners’ equity
				Common stock and paid-in surplus	$	142466
				Retained earnings		?

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? (round 2 decimal places)

Answer 1