Martin Industries, Inc., Has Experienced

Req 1Last years net incomeDividend payout ratioLast Years Dividend paid Last Years Retained Earnings(Net Income x Dividend Payout Ratio)(Net Income - Dividends Paid)Req 2Additional building requiredIncrease in assets by(Additional investment in building is equivalent to 25% of the current Assets, so back calculated the current assets)Assets before expansionAssets after expansion(Assets before expansion + additional building required)Debt to total asset ratioDebt before expansion(Assets before expansion x Debt to total asset ratio)Debt after expansion(Assets after expansion x Debt to total asset ratio)Debt needed for the project(Debt after expansion - debt before expansion)Req 3Increase in assets due to expansionRetained earnings from Req. 1Debt needed for the project in Req. 2Additional external equity required(Increase in assets due to expansion - retained earnings - debt needed for the project)Req 4(If dividend paid is 0, entire net income is retained earnings)Explanation