Reference no: EM132647532
Global Gold Inc. Proforma Income Income Statement Statement January 1 to December 31, 2020
Sales 5905,000
Direct Costs 710,000 12 000
Inersat capence 19,700
Income Before Tax 160,300
Income Tax 57,135
Net Income 106,145
Lavidends
Addition to H.E. Global Gold Inc. Balance Sheet As of December 11, 2020
Liabilities & Owner's Equity Current Asset Current Wabilities $ 25,000
Accounts Payable Account Forivable $ 131000 $ 91000
Inventory $ 76,000
Total Current Liabilities
Total Current Asset $144 010
Long Term Debt $156,000
Food Assets Owner's Equity Net Plant &Equip 5364,000
Common Stock 5 21,000
Assume that sales for Global Gold Inc. are forecast to grow by 20% in 2021. Interest expense, the tax rate and the dividend payout ratio remain the same as in 2020. Direct costs, SG&A, current assets and Accounts Payable increase at 20%, the same growth rate as sales. Notes payable, long term debt and common stock do not change. Assume that initially the firm is operating at capacity.
Question 1: If Global Gold is currently operating at only 75% of capacity, the total external financing required (EFR) would be?
a. $3,567
b. $485
c. $2,225
d. $4,990
e. None - the firm has sufficient internally generated funds to support its growth.