Question

The most recent financial statements for Martin, Inc., are shown here: Income Statement Sales $16,000 Costs...

The most recent financial statements for Martin, Inc., are shown here:

Income Statement
Sales $16,000
Costs −9,600
Taxable income $6,400
Taxes (21%) −1,344
Net income $5,056
Balance Sheet
Assets $44,800 Debt $22,000
Equity 22,800
Total $44,800 Total $44,800

Assets and costs are proportional to sales. Debt and equity are not. A dividend of $970 was paid, and Martin wishes to maintain a constant payout ratio. Next year’s sales are projected to be $19,680. What is the external financing needed? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Growth rate in sales=(19680-16000)/16000

=23%

Dividend payout ratio=Dividend payout/Net income

=970/5056

=0.191851266

Sales 19680
Costs(9600*1.23) 11808
Taxable income 7872
Taxes(7872*21%) 1653.12
Net income 6218.88
Less:Dividends(6218.88*0.191851266) 1193.1
Addition to retained earnings 5025.78

Total assets would be=44800*1.23=$55104

Total equity would be=22800+Addition to retained earnings

=22800+5025.78=$27825.78

Total assets=Total liabilities+Total equity

Hence external financing needed=55104-(27825.78+22000)

=$5278.22

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The most recent financial statements for Martin, Inc., are shown here: Income Statement Sales $28,000 Costs...
The most recent financial statements for Martin, Inc., are shown here: Income Statement Sales $28,000 Costs −16,800 Taxable income $11,200 Taxes (21%) −2,352 Net income $8,848 Balance Sheet Assets $114,800 Debt $60,000 Equity 54,800 Total $114,800 Total $114,800 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $895 was paid, and Martin wishes to maintain a constant payout ratio. Next year’s sales are projected to be $33,040. What is the external financing needed? (Do...
The most recent financial statements for Martin, Inc.,are shown here: Income Statement Balance Sheet   Sales $...
The most recent financial statements for Martin, Inc.,are shown here: Income Statement Balance Sheet   Sales $ 27,300      Assets $ 117,000      Debt $ 25,900      Costs 16,100      Equity 91,100      Taxable income $ 11,200          Total $ 117,000         Total $ 117,000      Taxes (36%) 4,032          Net income $ 7,168    Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,841.4 was paid, and Martin wishes to maintain a constant payout ratio....
The most recent financial statements for GPS, Inc., are shown here: Income Statement Sales $23617 Costs...
The most recent financial statements for GPS, Inc., are shown here: Income Statement Sales $23617 Costs $10915 Taxable Income ? Taxes (40%) ? Net Income ? Balance Sheet Assets $50141 Debt $17575 Equity ? Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1655 was paid, and the company wishes to maintain a constant payout ratio. Next year’s sales are projected to be $29929. What is the external financing needed? (round 2 decimal places)
The most recent financial statements for GPS, Inc., are shown here: Income Statement Sales $20451 Costs...
The most recent financial statements for GPS, Inc., are shown here: Income Statement Sales $20451 Costs $10165 Taxable Income ? Taxes (40%) ? Net Income ? Balance Sheet Assets $57251 Debt $21944 Equity ? Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1501 was paid, and the company wishes to maintain a constant payout ratio. Next year’s sales are projected to be $27432. What is the external financing needed?
the most recent financial statements for GPS, Inc., are shown here: Income Statement Sales $21,685 Costs...
the most recent financial statements for GPS, Inc., are shown here: Income Statement Sales $21,685 Costs $11,856 Taxable Income ? Taxes (40%) ? Net Income ? Balance Sheet Assets $50,126 Debt $16,779 Equity ? Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,548 was paid, and the company wishes to maintain a constant payout ratio. Next year’s sales are projected to be $26,703. What is the external financing needed?
The most recent financial statements for GPS, Inc., are shown here: Income Statement Sales $23255 Costs...
The most recent financial statements for GPS, Inc., are shown here: Income Statement Sales $23255 Costs $14567 Taxable Income ? Taxes (40%) ? Net Income ? Balance Sheet Assets $55204 Debt $15813 Equity ? Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1618 was paid, and the company wishes to maintain a constant payout ratio. Next year’s sales are projected to be $29969. What is the external financing needed?
Problem 19-11 EFN (L04, CFA8) The most recent financial statements for Martin, Inc., are shown here:...
Problem 19-11 EFN (L04, CFA8) The most recent financial statements for Martin, Inc., are shown here: Income Statement Sales $20,500 Costs −12,300 Taxable income $8,200 Taxes (21%) −1,722 Net income $6,478 Balance Sheet Assets $77,900 Debt $33,000 Equity 44,900 Total $77,900 Total $77,900 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $865 was paid, and Martin wishes to maintain a constant payout ratio. Next year’s sales are projected to be $23,780. What is...
The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Balance Sheet Sales...
The most recent financial statements for Cardinal, Inc., are shown here: Income Statement Balance Sheet Sales $ 32,200 Assets $ 75,600 Debt $ 38,800 Costs 18,550 Equity 36,800 Taxable income $ 13,650 Total $ 75,600 Total $ 75,600 Taxes (22%) 3,003 Net income $ 10,647 Assets and costs are proportional to sales. Debt and equity are not. A dividend of $4,000 was paid, and the company wishes to maintain a constant payout ratio. Next year’s sales are projected to be...
The most recent financial statements for Cardinal, Inc., are shown here:   Income Statement Balance Sheet   Sales...
The most recent financial statements for Cardinal, Inc., are shown here:   Income Statement Balance Sheet   Sales $23,600     Assets $115,000     Debt $46,600     Costs 16,000     Equity 68,400     Taxable income $7,600       Total $115,000       Total $115,000     Taxes (24%) 1,824       Net income $5,776   Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,480 was paid, and the company wishes to maintain a constant payout ratio. Next year's sales are projected to be $28,200. What is the external financing needed?
The most recent financial statements for Heine, Inc., are shown here:    Income Statement Balance Sheet...
The most recent financial statements for Heine, Inc., are shown here:    Income Statement Balance Sheet   Sales $ 33,600   Assets $ 54,100   Debt $ 22,100   Costs 25,600   Equity 32,000   Taxable income $ 8,000   Total $ 54,100   Total $ 54,100   Taxes (40%) 3,200       Net income $ 4,800       Assets and costs are proportional to sales. Debt and equity are not. A dividend of $1,500 was paid, and the company wishes to maintain a constant payout ratio. Next year’s...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT