Question
In: Finance
The most recent financial statements for GPS, Inc., are shown here: Income Statement Sales $21706 Costs...
The most recent financial statements for GPS, Inc., are shown here:
| Income Statement | |
| Sales | $21706 |
| Costs | $14096 |
| Taxable Income | ? |
| Taxes (40%) | ? |
| Net Income | ? |
| Balance Sheet | |||
| Assets | $55199 | Debt | $22015 |
| Equity | ? | ||
Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1887 was paid, and the company wishes to maintain a constant payout ratio. Next year’s sales are projected to be $29409.
What is the external financing needed? (round 2 decimal places)
Solutions
Expert Solution
| Income Statement | Recent | Projected |
| Sales | 21706 | 29409.00 |
| Costs | 14096 | 19098.37 |
| Taxable Income | 7610 | 10310.63 |
| Taxes 40% | 3044 | 4124.25 |
| Net Income | 4566 | 6186.38 |
| Less: Dividend | 1887 | 2556.66 |
| Retained earnings | 2679 | 3629.72 |
EFN = (Projected assets - old assets) - Retained earnings
= (55199*29409/21706-55199) - 3629.72
=$15959.24
WORKINGS
jeff jeffy answered 1 year agoRelated Solutions
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