Question
I wonder how is the FORMULA TO CALCULATE % change in sales, Projected total assets, and Projected Current Liabilities! I know the answer but I
I wonder how is the FORMULA TO CALCULATE % change in sales, Projected total assets, and Projected Current Liabilities!
I know the answer but I do not know where does the answer comes from. I NEED A FORMULA. NOT JUST A NUMBER
Here is the question and answer :
XYZ has the following financial information for 2018:
- Sales = $2M, Net Inc. = $0.4M, Div. = $0.1M
- C.A. = $0.4M, F.A. = $3.6M
C.L. = $0.2M, LTD = $1M, C.S. = $2M, R.E. = $0.8M
If 2019 sales are projected to be $2.4M, what is the amount of external financing needed, assuming XYZ is operating at full capacity, and profit margin and payout ratio remain constant?
Projected total assets = 4 X (1+0.2) = 4.8
Projected Current Liabilities = 0.2 X (1+0.2) = 0.24
% change in sales = 2.4-2/ 2 = 0.2
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