Question
After adding a new line of widgets, Worldwide expects all assets and current liabilities to shrink with sales. the company has sales for the year
After adding a new line of widgets, Worldwide expects all assets and current liabilities to shrink with sales. the company has sales for the year just ended of $20 million. The company also has a profit margin of 20 percent, a return ratio of 25 percent, and expected sales of $18 million next year.
Assets Liabilities and Equity
Current assets $2,500,000 Current Liabilites $1,250,000
Fixed Assets $3,500,00 Long term debt $1,500,000 Equity $3,250,000
Total Assets $6,000,000 Total liabilities and equity $6,000,000
Worldwide Widgets shows the following on its balance sheet. What amount of additional funds (AFN) will worldwide need from external sources to fund the expected growth? What does the AFN show?
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