Question: The most recent financial statements for Moose
The most recent financial statements for Moose Tours, Inc., appear below. Sales for 2016 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales. If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 20 percent growth rate in sales?
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MOOSE TOURS, INC. 2015 Income Statement Sales $752,500 Costs 585,600 Other expenses 15,400 Earnings before interest and taxes $151,500 Interest expense 11,340 Taxable income $140,160 Тахes 49,056 Net income $91,104 Dividends $27,331 Addition to retained earnings 63,773 MOOSE TOURS, INC. Balance Sheet as of December 31, 2015 Liabilities and Owners' Equity Assets Current assets Current liabilities Cash $ 21,632 Accounts payable $ 58,140 Accounts receivable 34,799 Notes payable 14,535 $ 72,675 $135,000 Inventory 74,300 Total Total $130,731 Long-term debt Owners' equity Fixed assets Common stock and paid-in surplus $I15,000 Net plant and equipment $353,120 Retained earnings 161,176 Total $276,176 Total assets $483,851 Total liabilities and owners' equity $483,851
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