The Optical Scam Company has forecast a sales growth rate of 20 percent for next year. Current assets, fixed assets, and short-termdebt are proportional to sales. The current financial statements are shown here:SalesCostsTaxable incomeTaxesNet incomeDividendsAddition to retained earningsCurrent assetsFixed assetsTotal assetsAssetsCurrent assetsFixed assetsINCOME STATEMENTTotal assets$ 7,230,00018,390,000$ 1,149,9821,724,853Assetsb-2. External financing neededc. Sustainable growth rate$ 25,620,000a. Calculate the external funds needed for next year using the equation from the chapter.Note: Do not round intermediate calculations.External financing neededb-1. Prepare the firm's pro forma balance sheet for next year.Note: Do not round intermediate calculations.BALANCE SHEETShort-term debtLong-tern debtCommon stockAccumulated retained earnings$ 30,500,00026,077,300$ 4,422,7001,547,945$ 2,874,755Liabilities and EquityTotal equityTotal liabilities and equityBALANCE SHEET%$ 7,320,0003,800,000$ 4,250,00010,250,000$ 14,500,000$ 25,620,000Liabilities and equityShort-term debtLong-term debtCommon stockAccumulated retained earningsTotal equityTotal liabilities and equityb-2. Calculate the external funds needed.Note: Do not round intermediate calculations.c. Calculate the sustainable growth rate for the company based on the current financial statements.Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.. 32.16.

Balance sheet stands for the statement and information that shows the assets and liabilities of the…

The Optical Scam Company has forecast a sales growth rate of 20 percent for next year. Current assets, fixed assets, and short-term debt are proportional to sales. The current financial statements are shown here: INCOME STATEMENT Sales Costs Taxable income Taxes Net income Dividends Addition to retained earnings $ 1,149,982 1,724,853 $ 30,500,000 26,077,300 $4,422,700 1.547,945 $ 2,874,755

The Optical Scam Company has forecast a sales growth rate of 20 percent for next year. Current assets, fixed assets, and short-term debt are proportional to sales. The current financial statements are shown here: INCOME STATEMENT Sales Costs Taxable income Taxes Net income Dividends Addition to retained earnings $ 1,149,982 1,724,853 $ 30,500,000 26,077,300 $4,422,700 1.547,945 $ 2,874,755

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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