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Prepare pro-forma income statement balance sheet

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Reference no: EM132931190

The most recent financial statements for GPS, Inc., are shown below:

Dividend Paid: 1,400

Retained Earnings: 1300

Income statement Balance sheet

Sales19,500

Assets$98,000

Debt$52,500

Costs15,000

Total$98,000

Equity45,500

EBIT4,500

Total$98,000

Taxes (40%)1,800

Net income2,700

  • Sales growth of 12% is projected for next year.
  • Assets and costs are proportional to sales, Debt and equity are not.
  • The company wishes to maintain a constant payout ratio.

Based on the above information:

Problem 1. Prepare pro-forma Income statement and Pro-Forma Balance sheet and calculate the External Financial Needs (EFN).

Problem 2. Calculate the internal growth rate

Problem 3. Calculate the sustainable growth rate.

Reference no: EM132931190

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