The most recent financial statements for Williamson, Inc., are shown here (assum
ID: 2739917 • Letter: T
Question
The most recent financial statements for Williamson, Inc., are shown here (assuming no income taxes): Income Statement Balance Sheet Sales $ 6,900 Assets $ 15,950 Debt $ 6,350 Costs 4,360 Equity 9,600 Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year’s sales are projected to be $_____. What is the external financing needed? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) External financing needed _____$
Explanation / Answer
There is no criteria applying which we can calculate the amount of projected sales.
Assuming the projected sales to be $7935
% increase in sales = (7935 - 6900) / 6900 = 15%
Costs will increase by 15% too
So, the costs would be 4360+15% = 5014
Net income would be = 7935 - 5014 = $2921
The amount of assets would be = 15950 + 15% = $18342.5
The new equity would be = 9600 + 2921 net income = $12521
External funds needed = Total assets- Total liabilities and equity
= 18342.5 - (6350 + 12521)
= $528.50