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Pro forma. You are a financial analyst that has been hired to forecast the possible funding need for a company based on its financial information and future plans.

You know that the net property, plant, and equipment at the end of 2018 was $25,000K and it currently equals $30,000K. Long-term debt at the end of 2018 was $15,000K and it currently equals $17,000K.

You assumed that sales will decreased by 10 percent. Given the companys recent income statement, you constructed the pro forma below:

Net Income Statement, Fiscal Year End 2019 (in thousands of $)		Proforma	Ratio	assumptions
Sales	30000	27000	(30000 x0.9)	PPE 2018 = 25,000
Cost of Goods Sold	20000	18000	[A]	PPE 2019 = 30,000
Depreciation	3000	3600	[B]	LT DEBT 2018 = 15,000
EBIT	7000	5400		LT DEBT 2019 = 17,000
Interest Expense	1200	1360	[C]
Pre-Tax Income	5800	4040
Tax	870	606	[D]
Net Income	4930	3434

In addition to the $1,200K dividend, it will also build a new plant that will require a capital expenditure of $900K and net working capital will decrease by $700K. What is the net funding need for 2020 and how should the company use long term debt in response to the net funding need? Show your work as follows:

NFN = the formula

NFN = the values (no need to place K beside the values)

NFN = answer (no need to place K beside the values)

The firms should retire or issue X-amount of long term debt, or do nothing.

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