Douglas Enterprises Income Statement For The Present Year Particulars Amount Sales $4,840 Costs $4,120 Taxable Income $720 Taxes $245 Net Income $475 Dividends $190 Addition To Retained Earnings $285 Douglas Enterprises Balance Sheet For The Present Year
Douglas enterprises
Income statement for the present year
Particulars | Amount |
Sales | $4,840 |
Costs | $4,120 |
Taxable income | $720 |
Taxes | $245 |
Net income | $475 |
dividends | $190 |
Addition to retained earnings | $285 |
Douglas enterprises
Balance sheet for the present year
Assets | Amount | Liabilities | Amount |
Cash | $1,010 | Accounts payable | $536 |
Accounts receivables | $302 | Notes payable | $1,500 |
Inventory | $361 | Current liabilities | $2,036 |
Current assets | $1,673 | Long-term debt | $1,200 |
Fixed assets | $5,200 | Common stock | $3,000 |
| | Retained earnings | $637 |
Total assets | $6,873 | Total liabilities and equity | $6,873 |
- The sales of the company are expected to increase by 14% nextyear. The firm is currently producing at full capacity. The companywishes to maintain a constant debt-equity ratio and a constantdividend payout ratio. Calculate the external financing amount forthe company. (20 marks)
- What is the Internal growth rate for the company? (20marks)
- What is the sustainable growth rate for the company? (20marks)
- How do you compare the two growth rates of the company? Whichone of the two is likely to help the company more in initiatingcapital investment projects in the future? (20 marks)
- Calculate ROE through Dupont identity and describe the sourcesof return for the company. (20 marks)
