Questions:

A.The "Three Friends Company" has a target dividend payout of $147,000 of net income. Based on the 2021 financial statements relationships, estimate the sustainable sales growth rate for the "Three Friends Company" for 2022 with retention rate are 1?

B. Sustainable sales growth rate for 2022 is 33 percent. Please project the income statement and project the balance sheet. To note, in 2022, the "Three Friends Company" did not pay their dividend. (10%)

C. Sales are forecasted to increase an additional 30 percent in 2023 over 2022. Estimate Additional funds needed (AFN) that the "Three Friends Company" will need to finance its 2023 sales growth plans?

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Digital transformation is the process of using ICT that brings changes to social activities, the business world, and in carrying out business processes so that they can meet needs more quickly and easily. This prompted three young people to establish a digital company called "The Three Friends Company" in the city of Florida, United States in early 2020. These three young people are alumni of the University of North Florida. In the last two years "The Three Friends Company" has developed very well. The company's financial statements in the form of income statements and balance sheets can be seen in the table below: Cash Accounts receivable Inventory Total current assets Fixed assets, net Total assets Accounts payable Accruals Bank loan Total current liabilities Long-term debt Common stock ($1 par value) Additional paid-in-capital Retained earnings Total liabilities and equity Net sales Cost of goods sold Gross profit Marketing General and administrative Depreciation EBIT Interest Earnings before taxes Income taxes (30% rate) THE THREE FRIENDS COMPANY BALANCE SHEETS Net income Cash dividends Net income after dividends 2020 $87,500 $350,000 $787,500 + $1,225,000 $525,000 + $1,750,000 $227,500 $100,000 $157,500 + $485,000 $700,000 $75,000 $350,000 $140,000+ $1,750,000 THE THREE FRIENDS COMPANY INCOME STATEMENT 2020 $2,300,000 $1,365,000 $935,000 $227,500 $262,500 $70,000 - $375,000 $75,000- $300,000 $90,000 $210,000 $70,000 $140,000 2021 $87,500 $525,000 $997,500 + $1,610,000 $665,000 + $2,275,000 $315,000 $135,000 $157,500 $607,500 $962,500 $75,000 $350,000 $280,000 + $2,275,000 2021 $2,800,000 $1,680,000 $1,120,000 $280,000 $262,500 + $92,500 $485,000 $75,000 $410,000 $123,000 $287,000 $147,000 $140,000 Digital transformation is the process of using ICT that brings changes to social activities, the business world, and in carrying out business processes so that they can meet needs more quickly and easily. This prompted three young people to establish a digital company called "The Three Friends Company" in the city of Florida, United States in early 2020. These three young people are alumni of the University of North Florida. In the last two years "The Three Friends Company" has developed very well. The company's financial statements in the form of income statements and balance sheets can be seen in the table below: Cash Accounts receivable Inventory Total current assets Fixed assets, net Total assets Accounts payable Accruals Bank loan Total current liabilities Long-term debt Common stock ($1 par value) Additional paid-in-capital Retained earnings Total liabilities and equity Net sales Cost of goods sold Gross profit Marketing General and administrative Depreciation EBIT Interest Earnings before taxes Income taxes (30% rate) THE THREE FRIENDS COMPANY BALANCE SHEETS Net income Cash dividends Net income after dividends 2020 $87,500 $350,000 $787,500 + $1,225,000 $525,000 + $1,750,000 $227,500 $100,000 $157,500 + $485,000 $700,000 $75,000 $350,000 $140,000+ $1,750,000 THE THREE FRIENDS COMPANY INCOME STATEMENT 2020 $2,300,000 $1,365,000 $935,000 $227,500 $262,500 $70,000 - $375,000 $75,000- $300,000 $90,000 $210,000 $70,000 $140,000 2021 $87,500 $525,000 $997,500 + $1,610,000 $665,000 + $2,275,000 $315,000 $135,000 $157,500 $607,500 $962,500 $75,000 $350,000 $280,000 + $2,275,000 2021 $2,800,000 $1,680,000 $1,120,000 $280,000 $262,500 + $92,500 $485,000 $75,000 $410,000 $123,000 $287,000 $147,000 $140,000