d. How will the external financing needed (EFN) for 20X3 be affected if Delta is only operating at 70% capacity? Interpret this EFN number, and explain what the firm can do with it. (5 marks)

This is what I have done so far but I cannot figure out what numbers in the Balance sheet to recalculate the EFN. I know that Sales become 1,602,577/0.7=2,289,395.714 on the income statement but I'm struggling with what numbers I adjust on the Financial Position so I can calculate the new EFN.

1. a) Comprehensive Income Statement for Delta Corporation 20X3 ($amount)

(Percentage of Sale Approach +20%)

Sales	1,602,577
Cost of Goods Sold	721,159
Depreciation	240,386
Interest paid	42,960
Gross Income	597,480
Tax (30%)	179,244
Net Income	418,236
Dividends (35%)	146,383
Addition to Retained Earnings	271,853

Statement of Financial Position for Delta Corporation 20X3 ($amount)

(Percentage of Sale Approach +20%)

Current Assets		Liabilities
Cash (113,516x1.2)	136,219	Accounts Payable (333,870x1.2)	400,644
Accounts Receivable (400,644x1.2)	480,773	Notes Payable	37,000
Inventory (400,644x1.2)	480,773	Long-term Debt	500,000
Total Current Assets	1,097,765	Total Liabilities	937,644
Net Fixed Assets (1,602,577x1.2)	1,923,092	Owners Equity
Total Assets	3,020,857	Common Stock	1,000,000
		Retained Earnings	918,364
		External Financing needed	164,849
		Total Liabilities and Owners Equity	3,020,857

External Finance Needed Steps as follows:

I)Current Assets+Fixed Assets

1,097,765+1,923,092

=3,020,857

II)Total Liabilities + Common Stock + Retained Earnings

=937,644+1,000,000+918,364

=2,856,008

III)EFN

=3,020,857-2,856,008

=164,849

Therefore, the amount of external finance needed by Delta Corporation is $$164,849.

j

b) Capital Intensity Ratio=Total Assets(2012)Sales(2012)

=2,517,3811,335,481

=1.884999487

Therefore, the Capital Intensity Ratio for Delta Corp. for 2012 is 1.8850.

c)Operating Capacity=Net Sales (2012)Percentage of Current Capacity (2012)

=1,335,4810.7

=$1,907,830

Therefore, Delta Corps full capacity sales for 2012 is $1,907,830.00.