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# Mc Govney Co Financial Statements

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The most recent financial statements for Mc Govney Co. are shown here:

Income Statement Balance Sheet
Sales \$ 52,400 Current assets \$ 22,600 Long-term debt \$ 52,000
Costs 42,200 Fixed assets 92,000 Equity 62,600

Taxable income \$ 10,200 Total \$ 114,600 Total \$ 114,600

Taxes (34%) 3,468

Net income \$ 6,732

Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt-equity ratio.

What is the maximum increase in sales that can be sustained assuming no new equity is issued? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Maximum increase in sales \$

#### Solution Preview

Suppose the increase rate is r. (unit: %)
Now, projected net income=6732(1+r) and projected asset=114600(1+r).

So projected ...

#### Solution Summary

The soluton gives detailed steps on finding the maximum increase in sales that can be sustained assuming no new equity is issuedã€‚All formula and calculations are shown and explained.

\$2.49