48. Clearer Paint Company has plants in 3 major cities. Sales for last year were P100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. Clearer Paint is already using assets at full capacity.
Balance Sheet
(in million pesos)
Assets
Liabilities & Stockholders’ Equity
Current assets
P50
Accounts payable & accruals
P25
Notes payable – long-term
30
Fixed assets
40
Common Stock
15
Retained Earnings
20
Total
90
Clearer Paint has an after- tax profit margin of 5%, and a dividend payout ratio of 30%. If sales grow by 10% next year, the required new financing to finance the expansion is
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