Hungry Kids 2012 Income Statement Net sales $ 4,700 Cost of goods sold 3,300 Depreciation 685 Earnings
Question:
| Hungry Kids | ||
| Net sales | $ | 4,700 |
| Cost of goods sold | | 3,300 |
| Depreciation | | 685 |
| Earnings before interest and taxes | $ | 715 |
| Interest paid | | 170 |
| Taxable Income | $ | 545 |
| Taxes | | 202 |
| Net income | $ | 343 |
| Dividends | $ | 66 |
| Addition to retained earnings | $ | 277 |
| Hungry Kids | ||||||
| | 2012 | | | 2012 | ||
| Cash | $ | 70 | | Accounts payable | $ | 1,380 |
| Accounts rec. | | 470 | | Long-term debt | | 1,570 |
| Inventory | | 960 | | Common stock | $ | 2,100 |
| Total | $ | 1,500 | | Retained earnings | | 3,150 |
| Net fixed assets | | 6,700 | | | | |
| Total assets | $ | 8,200 | | Total liabilities & equity | $ | 8,200 |
Hungry Kids is currently operating at full capacity (Hint: Thus all assets are spontaneous). The profit margin and the dividend payout ratio are held constant. Net working capital and fixed assets vary directly with sales. Sales are projected to increase by 5 percent. What is the external financing need?
$69
$67
$68
$50
$49
Expert Answer:
