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1. Pro Forma Statements [LO1] Consider the following simplified financial statements for the Yoo Corporation (assuming no income taxes):

The company has predicted a sales increase of 15 percent. It has predicted that every item on the balance sheet will increase by 15 percent as well. Create the pro forma statements and reconcile them. What is the plug variable here?

6. Calculating Internal Growth [LO3] The most recent financial statements for Schenkel Co. are shown here:

Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. What is the internal growth rate?

Income Statement $36,000 Assets Sales Costs 29,800 Net income 6,200 Total Balance Sheet $26,400 Debt 6,300 Equity 20.100 $26,400 Total $26,400