Question

The most recent financial statements for Crosby, Inc., follow. 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. Assume the firm is operating at full capacity and the debt-equity ratio is held constant.

CROSBY, INC.
2017 Income Statement Sales   $980,760   Costs    792,960   Other expenses    20,060        Earnings before interest and taxes   $167,740   Interest paid    14,740        Taxable income   $153,000   Taxes (21%)    32,130      Net income   $120,870        Dividends$39,250      Addition to retained earnings 81,620    

  

CROSBY, INC. Balance Sheet as of December 31, 2017
Assets				Liabilities and Owners’ Equity
Current assets				Current liabilities
Cash	$	27,920		Accounts payable	$	71,720
Accounts receivable		42,630		Notes payable		17,620
Inventory		95,910		Total	$	89,340
Total	$	166,460		Long-term debt	$	170,000
				Owners’ equity
Fixed assets				Common stock and paid-in surplus	$	140,000
Net plant and equipment	$	455,980		Retained earnings		223,100
				Total	$	363,100
Total assets	$	622,440		Total liabilities and owners’ equity	$	622,440

NB : I need only EFN Solution. This is the Pro-forma Income Statement below

Calculate the EFN for 20, 30, and 35 percent growth rates. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to the nearest whole dollar amount, e.g., 32.)

  

Answer 1