The most recent financial statements for Assouad, Inc., are shown here: Income Statement Balance Sheet Sales $3,500 Current assets $4,000 Current liabilities $970 Costs 2,500 Fixed assets 6,200 Long-term debt 3,500 Taxable income $1,000 Equity 5,730 Taxes (25%) 250 Total $10,200 Total $10,200 Net income $750 Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 50 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 20 percent.
The most recent financial statements for Assouad, Inc., are shown here: Income Statement Balance Sheet Sales $3,500 Current assets $4,000 Current liabilities $970 Costs 2,500 Fixed assets 6,200 Long-term debt 3,500 Taxable income $1,000 Equity 5,730 Taxes (25%) 250 Total $10,200 Total $10,200 Net income $750 Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 50 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 20 percent.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 1RE: Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of...
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Question
|
The most recent financial statements for Assouad, Inc., are shown here: |
| Income Statement | Balance Sheet | ||||
| Sales | $3,500 | Current assets | $4,000 | Current liabilities | $970 |
| Costs |
2,500 |
Fixed assets | 6,200 | Long-term debt | 3,500 |
| Taxable income | $1,000 | Equity | 5,730 | ||
| Taxes (25%) | 250 | Total |
$10,200 |
Total |
$10,200 |
| Net income |
$750 |
||||
|
Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 50 percent dividend payout ratio. As with every other firm in its industry, next year's sales are projected to increase by exactly 20 percent. |
|
What is the external financing needed? |
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