The most recent financial statements for Xporter, Inc., are shown here: Assets,
ID: 2821707 • Letter: T
Question
The most recent financial statements for Xporter, Inc., are shown here:
Assets, costs, and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a constant 24 percent dividend payout ratio. As with every other firm in its industry, next year’s sales are projected to increase by exactly 15 percent.
What is the external financing needed? (Negative amount should be indicated by a minus sign.)
(Omit the "$" sign and commas in your response. Enter your answer rounded to 2 decimal places. For example, $1,200.456 should be entered as 1200.46.)
Income Statement Sales $7294 Costs $5623 Taxable Income ? Taxes (34%) ? Net Income ?Explanation / Answer
Total assets were=Current assets+Fixed assets
=(3808+9729)=$13537
Total assets would be=(13537*1.15)=$15567.55
Beginning equity=(3808+9729)-(2014+3879)
=$7644
Ending equity=Beginning equity+Addition to retained earnings
=(7644+$963.89964)
=$8607.89964
Current liabilities would be=(2014*1.15)=$2316.1
Total assets=debt+equity
Hence external financing needed=($15567.55-$8607.89964-$(2316.1+3879))
=$764.55(Approx).
Sales(7294*1.15) $8388.1 Costs(5623*1.15) $6466.45 Taxable income $1921.65 Taxes@34% $653.361 Net income 1268.289 Less:dividend(1268.289*24%) $304.38936 Addition to retained earnings $963.89964