Calculate the sustainable growth rate for the company based


The Optical Scam Company has forecast a sales growth rate of 25 percent for next year. The current financial statements are shown here: Income Statement Sales $ 31,300,000 Costs 25,856,500 Taxable income $ 5,443,500 Taxes 1,905,225 Net income $ 3,538,275 Dividends $ 1,415,310 Addition to retained earnings 2,122,965 Balance Sheet Assets Liabilities and Equity Current assets $ 7,290,000 Short-term debt $ 6,886,000 Long-term debt 4,382,000 Fixed assets 19,002,000 Common stock $ 3,788,000 Accumulated retained earnings 11,236,000 Total equity $ 15,024,000 Total assets $ 26,292,000 Total liabilities and equity $ 26,292,000 a. Calculate the external financing needed for next year. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) External financing needed $ b-1. Prepare the firm’s pro forma balance sheet for next year. (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.) Balance Sheet Assets Liabilities and equity Current assets $ Short-term debt $ Long-term debt Fixed assets Common stock $ Accumulated retained earnings Total equity Total assets $ Total liabilities and equity $ b-2. Calculate the external financing needed. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) External financing needed $ c. Calculate the sustainable growth rate for the company based on the current financial statements. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate %

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Financial Management: Calculate the sustainable growth rate for the company based
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