Using the following income statement and balance sheet, create a pro-forma balance sheet. Assume a growth rate of 12%, and that the tax rate and dividend payout remain constant. Costs, Assets, and Accounts payable vary with sales, but the others do not, and the company is operating at 100% capacity

A. What is the proforma value for retained earnings (from balance sheet)?

B. What is the external financing needed?

C. Based on the proforma values, calculate the internal growth rate:

D. This internal growth rate is the amount of growth the Hoffman Company can achieve - without any external financing, without any current liability financing, without any external equity financing, or without any external debt financing

E. Based on the proforma values, calculate the sustainable growth rate:

F. This sustainable growth rate is the amount of growth the Hoffman Company can achieve: without any external financing, without any current liability financing, without any external equity financing, or without any external financing

Current Assets Cash A/R Inventory Total HOFFMAN COMPANY Balance sheet Current Liabilities 3,150.00 A/P 4,100.00 N/P 6,400.00 Total 13,650.00 Long Term Debt Owners' Equity 2,475.00 5,400.00 7,875.00 28,000.00 Fixed Assets Net P & E 41,300.00 Common R/E Total 15,000.00 4,075.00 19,075.00 TOTAL ASSETS 54,950.00 Total Liab & Equity 54,950.00 HOFFMAN COMPANY Income Statement Sales 46,000.00 Costs 37,600.00 Taxable income 8,400.00 Taxes 2,940.00 Net Income 5,460.00 Dividends 2,400.00 RE 3,060.00 Current Assets Cash A/R Inventory Total HOFFMAN COMPANY Balance sheet Current Liabilities 3,150.00 A/P 4,100.00 N/P 6,400.00 Total 13,650.00 Long Term Debt Owners' Equity 2,475.00 5,400.00 7,875.00 28,000.00 Fixed Assets Net P & E 41,300.00 Common R/E Total 15,000.00 4,075.00 19,075.00 TOTAL ASSETS 54,950.00 Total Liab & Equity 54,950.00 HOFFMAN COMPANY Income Statement Sales 46,000.00 Costs 37,600.00 Taxable income 8,400.00 Taxes 2,940.00 Net Income 5,460.00 Dividends 2,400.00 RE 3,060.00