Reference no: EM131882930

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 $ 757,000

Costs 592,000

Other expenses 13,000

Earnings before interest and taxes $ 152,000

Interest paid 15,000

Taxable income $ 137,000

Taxes (20%) 27,400

Net income $ 109,600

Dividends $ 21,920

Addition to retained earnings 87,680

FLEURY, INC.

Balance Sheet as of December 31, 2014

Assets Liabilities and Owners’ Equity

Current assets Current liabilities

Cash $ 21,640 Accounts payable $ 55,800

Accounts receivable 33,960 Notes payable 15,000

Inventory 70,920 Total $ 70,800

Total $ 126,520 Long-term debt $ 140,000

Fixed assets Owners’ equity

Net plant and equipment $ 490,000 Common stock and paid-in surplus $ 126,000

Retained earnings 279,720

Total $ 405,720

Total assets $ 616,520 Total liabilities and owners’ equity $ 616,520

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.)