Nbr of shares= Net income/ EPS
nbr of shares= 10000
new shares= 560
Current ratio= current assets/current liabilities
1.3= cash + acc rcvbl + inv / acc payable + notes payable
1.3= 96000/ 48000 + notes payable
notes payable= $ 25,846.15
Debt ratio= Total liabilities / total assets
55%= 73846.15 + LTD / 240000
LTD= 58153.85
Total added so far= 14000
AFN left= 1400
therefore common stock will increase by 1400
C.S and ADPIC= 41400
5% Add interest= 700
1st pass
Income st 2024 Income st 2025 Proforma
Sales $ 100,000.00 20% Sales
cost $ 50,000.00 cost
Other expenses $ 10,000.00 Other expenses
EBIT $ 40,000.00 EBIT
Interest expenses $ 10,000.00 Interest expenses
EBT $ 30,000.00 EBT
30% Taxes $ 9,000.00 30% Taxes
Net income $ 21,000.00 Net income
0.84 Dividents $ 8,400.00 1 Dividents
RE $ 12,600.00 RE
Balance sheet 2024 Balance sheet 2025 proforma
Cash $ 10,000.00 Cash
Acc Receivables $ 40,000.00 Acc Receivables
Inventory $ 30,000.00 Inventory
Fixes assets $ 120,000.00 Fixes assets
Total Assets $ 200,000.00 Total Assets
Accounts payable $ 40,000.00 Accounts payable
Note Payable $ 20,000.00 Note Payable
Long term debt $ 50,000.00 Long term debt
Total Liabilities $ 110,000.00 Total Liabilities
C.S and ADPIC $ 40,000.00 C.S and ADPIC
Retained earnings $ 50,000.00 Retained earnings
Total equity and Liab $ 200,000.00 Total equity and Liab
AFN
The outstanding finance required for this
increase in sales is $15,400
The outstanding finance required for this
increase in sales is $15,400
2nd pass
ncome st 2025 Proforma Income st 2025 Proforma
$ 120,000.00 20% Sales $ 120,000.00 we have additional 1
$ 60,000.00 cost $ 60,000.00 1400/ common stoc
$ 12,000.00 Other expenses $ 12,000.00 1400 / 2.5 = 560
$ 48,000.00 EBIT $ 48,000.00
$ 10,000.00 Interest expenses $ 10,700.00
$ 38,000.00 EBT $ 37,300.00
$ 11,400.00 30% Taxes $ 11,190.00
$ 26,600.00 Net income $ 26,110.00
$ 10,000.00 1 Dividents $ 10,560.00
$ 16,600.00 RE $ 15,550.00
ance sheet 2025 proforma Balance sheet 2025 proforma
$ 12,000.00 Cash $ 12,000.00
$ 48,000.00 Acc Receivables $ 48,000.00
$ 36,000.00 Inventory $ 36,000.00
$ 144,000.00 Fixes assets $ 144,000.00
$ 240,000.00 Total Assets $ 240,000.00
$ 48,000.00 Accounts payable $ 48,000.00
$ 20,000.00 Note Payable $ 25,846.15
$ 50,000.00 Long term debt $ 58,153.85
$ 118,000.00 Total Liabilities $ 132,000.00
$ 40,000.00 C.S and ADPIC $ 41,400.00
$ 66,600.00 Retained earnings $ 65,550.00
$ 224,600.00 Total equity and Liab $ 238,950.00
$ 15,400.00 AFN $ 1,050.00
nding finance required for this
sales is $15,400
nding finance required for this
sales is $15,400
we have additional 1400 common stock or
1400/ common stock price = nbr of new shares
1400 / 2.5 = 560
