Business, 05.02.2021 22:00 kobrien9146

Shown below is Jensen Company's projected income statement for year 2021, and the balance sheet as of the end of 2020. Pro Forma Income Statement 2021 Balance Sheet Dec. 31 2020 Dec. 31 2021
Revenues 7,000,000 Cash 30,000
Inventory 270,000
Fixed Assets (Net) 4,700000
Total Assets 5,000000
Payables 180,000
LT. Debt 18,20000
Equity 3,000000
Liabilities + Equity 5000000
Depreciation 5,00000
Other Expenses 5,800000
Income 7,00000
Dividends 500,000
Sales are expected to increase from $5 million in 2020 to $7 million in 2021, and net income is expected to increase from $500,000 in 2020 to $700,000 in 2021. To accommodate this sales growth Jensen will have to invest $2.5 million in a new warehouse and computerized distribution system. Working capital accounts, including cash, inventory, and payables, will grow at the same rate as sales. Jensen is contractually committed to pay down its long-term debt by $400,000 by the end of the year. For simplicity, ignore interest on debt. Compute Jensen's "Internal Growth Rate". Will Jensen need external capital during 2021? What specifically, is the amount of External Funds Needled (EFN) as of the end of year 2021?

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Shown below is Jensen Company's projected income statement for year 2021, and the balance sheet as o...

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