5) Another firm recently completed its fiscal year. The financial statements for last year follow: BALANCE SHEET Current Assets $ Net Fixed Assets $ 750,000 2,500,000 Current Liabilities $ Long Term Debt Net Worth $ 450,000 1,800,000 1,000,000 3,250,000 $ Total Assets $ 3,250,000 es INCOME STATEMENT Net Sales Expenses Net Profit $ Dividends $ $ $ 5,800,000 (4,930,000) 870,000 435,000 The firm is modeling the upcoming year to plan for needed external financing (NEF). The analyst makes the following assumptions: The sales division estimates a 25% increase in sales. The firm is operating at capacity, so fixed assets will remain proportional to sales. . . Forecast the amount of external funding needed in the upcoming year: NEF= Total Assets / Sales Change in Sales Current Liabilities / Sales Change in Sales Sales Net Profit Margin [1 - (Dividends/Net Profit)] X How might the firm reduce its reliance on borrowed funds