Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Broussard Skateboard's sales are expected to increase by 20% from $8.0 million in 2018 to $9.60 million in 2019 . Its assets tataied 54 millon

image text in transcribed
Broussard Skateboard's sales are expected to increase by 20% from $8.0 million in 2018 to $9.60 million in 2019 . Its assets tataied 54 millon at the end of 2018 . Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2018, current liablities were $1.4 milion, consisting of \$450,000 of accounits payable, $500,000 of notes payable, and $450,000 of accruals. The atter tax profit margin is forecasted to be 3%, and the forecasted payout ratio is 55%5. What would be. the additional funds needed? Do not round intermedlate calculations. Round your answer to the nearest dollar. Assume that the company's year-end 2018 assets had been 55 millice. is the company's "capital intensity" ratio the same or different? The capital intensity ratio is measured as A/S0. Broussard's current capital intensity ratio is Broussard is capital intensive - it would require increase in total assets to support the increase in sales

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Commercial Real Estate Investors Handbook

Authors: Steven D. Fisher

1st Edition

1601380372, 978-1601380371

More Books

Students also viewed these Finance questions