The most recent financial statements for Xporter, Inc., are shown here: Assets,
ID: 2821634 • 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 20 percent dividend payout ratio. As with every other firm in its industry, next year’s sales are projected to increase by exactly 11 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 $6867 Costs $5554 Taxable Income ? Taxes (34%) ? Net Income ?Explanation / Answer
Taxable income = sales - cost
= 6867 - 5554
= 1313
Taxes = 34% 0f 1313 = 446.42
net Income = taxable income - taxes
= 1313 - 446.42
= $866.58
Dividned payout = 20% of Net income = $173.32
Retained Earning = $693.26
Equity = Current Asset + fixed Asset - current liabilities - long term debt
= $7400
next year sales increase by 11%
net income = $866.58 * 1.11 = $961.9
retained earning = $769.52
Total asset = $14952.06
Current Liabilities = $2398.71
Equity = $7400 + 769.52 = $8169.52
External Financing needed = $14952.06 - 8169.52 - 2398.71 - 3885
= $498.83
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.