The table given below summarizes the 2019 income statement and end-year balance sheet of Drakes Bowling Alleys. Drakes financial manager forecasts a 10% increase in sales and costs in 2020. The ratio of sales to average assets is expected to remain at 0.40. Interest is forecasted at 5% of debt at the start of the year.

Income Statement
$ in thousands
Sales	$	2,100	(40% of average assets)a
Costs		1,575	(75% of sales)
Interest		80	(5% of debt at start of year)b
Pretax profit		445
Tax		178	(40% of pretax profit)
Net income	$	267

^aAssets at the end of 2018 were $5,040,000.

^bDebt at the end of 2018 was $1,600,000.

Balance Sheet
$ in thousands
Net assets	$	5,460		Debt	$	1,600
				Equity		3,860
Total	$	5,460		Total	$	5,460

1. What is the implied level of assets at the end of 2020? (Enter your answer in dollars not in thousands.)

Ending assets

2. If the company pays out 50% of net income as dividends, how much cash will Drake need to raise in the capital markets in 2020? Assumes debt remains constant. (Enter your answer in dollars not in thousands.)

External financial needs

3. If Drake is unwilling to make an equity issue, what will be the debt ratio at the end of 2020?

Debt ratio

%