15. Use the below information to answer the following question.
	Income Statement
	For the Year
	Sales		$42,700
	Cost of goods sold		29,250
	Depreciation		3,750
	Earnings before interest and taxes		$ 9,700
	Interest paid		1,360
	Taxable income		$ 8,340
	Taxes		2,840
	Net income		$ 5,500
	Dividends $1,925
	Balance Sheet
	End-of-Year
	Cash	$1,320
	Accounts receivable	3,780
	Inventory	10,200
	Total current assets	$15,300
	Net fixed assets	33,600
	Total assets	$48,900
	Accounts payable	$ 3,650
	Long-term debt	18,100
	Common stock ($1 par value)	15,000
	Retained earnings	12,150
	Total Liab. & Equity	$48,900
Assume this firm is operating at full capacity. Also assume that assets, costs, and current liabilities vary directly with sales. The dividend payout ratio is constant. What is the external financing need if sales increase by 14 percent?

Answer rating: 100% (QA)

External Financing Need Calculation 1 Calculate the increase in sales Sales increase 14 42700 6038 2 ... View the full answer