Do 3 iterations.

What is the EFN

Using the percent sales method, estimate the amount of external financing

XYZ corp will need to fund the next years operations

only compute 3 iterations

Assume that Sales will grow by 20% from the 2012 level

Assume that the firm will not purchase any additional assets

Assume that depreciation expense will be $10 in 2013.

Assume the interest rate on long-term debt will be 10%

The tax rate is 30%

		% of	Iteration
		Sales	1	2	3
Balance sheet	2012		2013	2013	2013
Current Assets	50
Fixed assets, net	100
Total Assets	150
Current liabilities	40
Long - term debt (PLUG)	50
Retained Earnings	60
Liabilities and equity	150
Income statement			2013	2013	2013
Sales	50
COGS	20
Gross margin	30
Operating expense	10
Depreciation	10
Interest	5
EBT	5
Taxes	1.5
Net income	3.5