Assets and costs are proportional to sales debt and equity


The most recent financial statements for Watchtower, Inc. are shown here (assuming no income taxes):

Income Statement Balance Sheet
Sales $5,100 Assets 14,500 Debt 10,200
Costs 3,480 Equity 4,300
Net Income 1,620 Total 14,500 Total $14,500

Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year's sales are projected to be $ 5,967. What is the external financing needed?

 

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Finance Basics: Assets and costs are proportional to sales debt and equity
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