Creative Analysis, Inc. is currently operating at maximum capacity. Assume that all costs and networking capital vary directly with sales. The dividend payout ratio will remain constant. How much isthe External Financing needed (EFN) if sales are projected to increase by 10%?Income Statement end of last year:Sales$8,500Costs$7,960Net Income $540Dividends paid = $324Balance Sheet as of end of last year:CashAccounts ReceivablesInventoryNet Fixed AssetsTotal assets-$25.1$156.1O $296.5-$67.6O $274.9Assets$1,600$975$2,425$2,200$7,200Accounts PayableLong-Term DebtCommon StockRetained EarningsTotal Liabilities &EquityLiabilities & Equity$2,075425$3000$1,700$7,200

In this question, we are required to determine the Needed External Financing.

Creative Analysis, Inc. is currently operating at maximum capacity. Assume that all costs and net working capital vary directly with sales. The dividend payout ratio will remain constant. How much is the External Financing needed (EFN) if sales are projected to increase by 10%? Income Statement end of last year: Sales Costs Net Income Dividends paid = $324 Balance Sheet as of end of last year: Cash Accounts Receivables Inventory Net Fixed Assets Total assets -$25.1 $156.1 $296.5 $8,500 $7,960 $540 -$67.6 O $274.9 Assets $1,600 $975 $2,425 $2,200 $7,200 Accounts Payable Long-Term Debt Common Stock Retained Earnings Total Liabilities & Equity Liabilities & Equity $2,075 425 $3000 $1,700 $7,200

Creative Analysis, Inc. is currently operating at maximum capacity. Assume that all costs and net working capital vary directly with sales. The dividend payout ratio will remain constant. How much is the External Financing needed (EFN) if sales are projected to increase by 10%? Income Statement end of last year: Sales Costs Net Income Dividends paid = $324 Balance Sheet as of end of last year: Cash Accounts Receivables Inventory Net Fixed Assets Total assets -$25.1 $156.1 $296.5 $8,500 $7,960 $540 -$67.6 O $274.9 Assets $1,600 $975 $2,425 $2,200 $7,200 Accounts Payable Long-Term Debt Common Stock Retained Earnings Total Liabilities & Equity Liabilities & Equity $2,075 425 $3000 $1,700 $7,200

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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