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A new market opportunity has opened, and you expect that you will be able to double your sales in 2019. Assume that COGS, operating expenses,
A new market opportunity has opened, and you expect that you will be able to double your sales in 2019. Assume that COGS, operating expenses, current assets and current liabilities maintain the same PERCENTAGE OF SALES as in 2018. Assume no new fixed assets, nothing from 2018 was fully depreciated, and you will have the same dividend policy in 2019 as you did in 2018.
Use the financial statements below to determine if additional funds will be needed, and if so, how much.
Income Statement | ||
2018 | 2019 | |
Sales | 10000 | |
COGS | 4000 | |
Gross Profit | ||
Operating Expenses | 2000 | |
Depreciation | 250 | |
Interest | 750 | |
Pre Tax Profit | 3000 | |
Tax at 33.33 % (round to nearest $1) | ||
Net Profit | ||
Dividends | 0 | |
BalanceSheet | ||
Current Assets | 25000 | |
Fixed Assets | 15000 | |
Total Assets | ||
Current Liabilities | 17000 | |
LongTerm Debt | 3000 | |
Common Stock | 7000 | |
Retained Earnings | 13000 | |
Total Liabilities & Equity (round to nearest $1) |
a- No Additional Funds Needed
b- $3,333
c- $65,000
d- $8,000
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