17 The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 35 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Sales Expenses Income Statement Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends $230,000 168,500 $ 61,500 9,500 $ 52,000 17,500 $ 34,500 $ 13,800 Balance Sheet Assets Liabilities and Stockholders' Equity Cash Accounts receivable Inventory $ 6,500 Accounts payable 42,000 55,000 Accrued wages Accrued taxes $ 22,800 2,450 4,650 Current assets $ 103,500 Fixed assets 90,000 Current liabilities Notes payable Long-term debt Common stock Retained earnings $ 29,900 9,500 27,500 110,000 16,600 $193,500 Total liabilities and stockholders' equity $ 193,500 Total assets Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit margin and payout ratio must be found from the income statement.) (Do not round intermediate calculations.) The firm