Question

The most recent financial statements for Fleury Inc., follow. Sales for next year are projected to grow by 22 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 $ 571919 Costs 509023 Other expenses 15980 Earnings before interest and taxes $ ? Interest paid 12654 Taxable income $ ? Taxes (30%) ? Net income ? Dividends $ 8852 FLEURY, INC. Balance Sheet Assets Liabilities and Owners’ Equity Current assets Current liabilities Cash $ 24829 Accounts payable $ 55104 Accounts receivable 37491 Notes payable 17484 Inventory 73425 Long-term debt $ 105229 Fixed assets Net plant and equipment $ 437325 Owners’ equity Common stock and paid-in surplus $ 129860 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 22 percent growth rate in sales?

Answer 1

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