The 2001 balance sheet and income statement for the

Lewis #6136
The 2001 balance sheet and income statement for the Lewis Company are shown below.Lewis
Company: Income Statement for December 31, 2001 (Thousands of
Dollars)Sales.................................... $8,000Operating costs.........................
7,450EBIT..................................... $ 550Interest....................................
150EBT..................................... $ 400Taxes (40%).............................. 160Net
income.............................. $ 240PER SHARE DATA:Common stock price.................
$16.96Earnings per share (EPS)............ $ 1.60Dividends per share (DPS).......... $ 1.04a. The
firm operated at full capacity in 2001. It expects sales to increase by 20 percent during 2002
and expects 2002 dividends per share to increase to $1.10. Use the projected financial
statement method to determine how much outside financing is required, developing the firm's
pro forma balance sheet and income statement, and use AFN as the balancing item.b. If the
firm must maintain a current ratio of 2.3 and a debt ratio of 40 percent, how much financing will
be obtained using notes payable, long-term debt, and common stock?View Solution:
The 2001 balance sheet and income statement for the Lewis

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