corporate Valuation and Financial Planning ilmpts: T Average 13 4. More on the AFN (Additional Funds Needed) equation Green Moose Industries reported sales of $890,000 at the end of last year, but this year, sales are expected to grow by Green Moe expects to maintain its current profit margin of 22% and dividend payout ratio of 20%. The following information was taken from Green Mooses balance sheet: Total assets: Accounts payable: Notes payable: $450,000 $80,000 $30,000 $80,000 Accrued liabilities: Based on the AFN equation, the firm's AFN for the current year is A negatively signed AFN value represents: A surplus of internally generated funds that can be invested in physical or financial assets or paid out as additional dividends A shortage of internally generated funds that must be raised outside the company to finance the company's forecasted future growth O A point at which the funds generated within the firm equal the demands for funds to finance the firm's future expected sales requirements Because of its excess funds, Green Moose Industries is thinking about raising its dividend payout ratio to satisy shareholders. Green Moose could pay out of its eamings to shareholders without needing to raise any external capital. (Hint: What can Green House increase its divided payout ratio to before the AFN becomes positive? Grade Nos Save & Co o e A Type here to search