14. Problem 5-10 Additional Funds Needed Garlington Technologies Inc.'s 2021 financial statements are shown below. Garlington Technologies Inc.: Balance Sheet as at December 31, 2021 $180,000 Accounts payable $360,000 360,000 Notes payable 156,000 720,000 Accruals 180,000 1,260,000 696,000 1,440,000 1,800,000 204,000 $2,700,000 Total liabilities and equity $2,700,000 Cash Receivables Inventories Total current assets Fixed assets Total assets Garlington Technologies Inc.: Income Statement for December 31, 2021 Sales Operating costs EBIT Interest EBT Taxes (40%) Net income Dividends Total current liabilities Common stock Retained earnings $3,600,000 3,279,720 320,280 18,280 302,000 120,800 $181,200 $108,000

- See income statement. b. Below is some additional information on Garlington: 1. Calculate the company's 2022 current ratio, ROE, EPS, and DPS based on the expansion and financing as in part a. Current ratio = Retum on eguity = a. Suppose that in 2022 sales increase by 10% over 2021 sales and that 2022 dividends will increase to $112,000, Construct the pro forma financial thatements using the forecasted financial statement method. Assume the firm operated at full capacty in 2021. Use an interest rate of 13\%, and assume that any new debt will be added at the end of the vear (so forecast the interest expense based on the debt balance at the beginning of the year), Cash does not earn any interest income. Assume that the AFN will be in the form of notes payable. Earnings per share =4 Bividends per share 3 I1. Because of an agreement with their lendet, Garlington's current ratio cannot drop below 1.7 or it will violate a debt covenant. How much can the company increase its notes payable and stal not violate its minimum current ratio? thorease in notes payable =5 Ift. Assume that Gartangton increases its notes payable to the maximum allowed under its current ratio restriction and issues stock (at the beginning of the vear) to raise the remaining funds required. Calculate the companr's AOF, EPS, and DPS AOC = cos=5 Deps=s W. Recaiculate Garington's ROE, EPS, and DPS if all the additional finanding was obtained through the sale of new common stock. ROE = EPS=$ Additional Funds Needed Garlington Technologles Inc's 2021 financial statements are shown below. Garlington Technologies Inc.: Income Statement for December 31, 2021 Additional Funds Needed Garlington Technologies Inc's 2021 financial statements are shown below. Garlington Technologies Inc.: Income Statement for December 31,2021 DEe income statement. b. Below is some oddtional information of Gartington