The most recent financial statements for Fleury Inc., follow. Sales for 2015 are projected to grow by 25 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.
FLEURY, INC.
2014 Income Statement
|
| Sales |
|
|
|
$ |
744,000 |
|
| Costs |
|
|
|
|
579,000 |
|
| Other expenses |
|
|
|
|
15,000 |
|
|
|
|
|
|
|
|
| Earnings before interest and taxes |
|
|
|
$ |
150,000 |
|
| Interest paid |
|
|
|
|
11,000 |
|
|
|
|
|
|
|
|
| Taxable income |
|
|
|
$ |
139,000 |
|
| Taxes (20%) |
|
|
|
|
27,800 |
|
|
|
|
|
|
|
|
| Net income |
|
|
|
$ |
111,200 |
|
|
|
|
|
|
|
|
| Dividends |
$ |
22,240 |
|
|
|
|
| Addition to retained earnings |
|
88,960 |
|
|
|
|
|
FLEURY, INC.
Balance Sheet as of December 31, 2014 |
| Assets |
|
Liabilities and Owners' Equity |
|
| Current assets |
|
|
|
Current liabilities |
|
|
|
| Cash |
$ |
20,340 |
|
Accounts payable |
$ |
54,500 |
|
| Accounts receivable |
|
32,660 |
|
Notes payable |
|
13,700 |
|
|
|
|
|
|
|
|
|
| Inventory |
|
69,620 |
|
Total |
$ |
68,200 |
|
|
|
|
|
|
|
|
|
| Total |
$ |
122,620 |
|
Long-term debt |
$ |
127,000 |
|
| Fixed assets |
|
|
|
Owners' equity |
|
|
|
| Net plant and equipment |
$ |
420,000 |
|
Common stock and paid-in surplus |
$ |
113,000 |
|
|
|
|
|
Retained earnings |
|
234,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
$ |
347,420 |
|
|
|
|
|
|
|
|
|
| Total assets |
$ |
542,620 |
|
Total liabilities and owners' equity |
$ |
542,620 |
|
|
|
|
|
|
|
|
|
|
If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 25 percent growth rate in sales? (Do not round intermediate calculations.)