A: All Star Enterprises anticipates a 19% growth in sales, but interest expense will grow by...

 

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A: All Star Enterprises anticipates a 19% growth in sales, but interest expense will grow by 7%. If they are operating at 96% capacity what is the external financing needed? B: Calculate their Internal Growth Rate and their Sustainable Growth Rate based on their 2013 Financial Statements All Star Enterprises Income Statement ($Thousands) 2013 Sales Cost of Goods Sold Depreciation EBIT Interest Taxable Income Taxes Net Income 821.00 605.00 83.00 133.00 11.00 122.00 40.26 81.74 Addition to RE 70.00 Dividends 11.74 821-0.96xFCS, therefore FCS = Growth in Fixed Assets = ARA MASALAR A: All Star Enterprises anticipates a 19% growth in sales, but interest expense will grow by 7%. If they are operating at 96% capacity what is the external financing needed? B: Calculate their Internal Growth Rate and their Sustainable Growth Rate based on their 2013 Financial Statements All Star Enterprises Income Statement ($Thousands) 2013 Sales Cost of Goods Sold Depreciation EBIT Interest Taxable Income Taxes Net Income 821.00 605.00 83.00 133.00 11.00 122.00 40.26 81.74 Addition to RE 70.00 Dividends 11.74 821-0.96xFCS, therefore FCS = Growth in Fixed Assets = ARA MASALAR

Answer rating: 100% (QA)

SOLUTION A To calculate the external financing needed we need to determine the increase in assets required to support the 19 growth in sales and the i... View the full answer