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The most recent financial statements for Zoso, Inc., are shown here (assuming no income taxes):   Income...

The most recent financial statements for Zoso, Inc., are shown here (assuming no income taxes):
  Income Statement Balance Sheet
  Sales $4,200     Assets $15,300     Debt $11,000  
  Costs 3,390     Equity 4,300  
    Net income

$810  

     Total

$15,300  

     Total

$15,300  

Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year's sales are projected to be $5,976.
Required:

What is the external financing needed? (Do not round your intermediate calculations.)

Solutions

Expert Solution

Growth rate in sales=(5976-4200)/4200

=42.2857143%

Sales 5976
Costs(3390*1.422857143) 4823.49
Net income 1152.51

Total assets would be=15300*1.422857143

=$21769.71

Total equity would be=4300+Net income

=4300+1152.51=$5452.51

Total assets=Total liabilities+Total equity

Hence external financing needed=21769.71-5452.51-11000

=$5317.2(Approx)

jeff jeffy answered 3 years ago
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