ILLUSTRATION The following is the financial statement of XYZ Company Limited. The company is seeking to make projections on its financing needs for the upcoming year. They have tasked you, as the Finance Officer, to make the relevant estimations and determine any additional funding needs. Statement of Profit or Loss for the Year Ending 31st October, 2021 Notes GH000 GH000 Sales A 2,500 Cost of Sales B (1,250) Gross Profit 1,250 Expenses: Administrative 25 Sales and Marketing C 130 General 15 (170) Earnings before Interest and Tax D 1,080 Interest E (400) Earnings before tax 680 Tax F (170) Earnings after tax 510 Dividends G (25) Retained Earnings 485 Statement of Financial Position As At 31st October, 2021 Non-Current Assets Notes GH000 Property H 40,000 Plant and Machinery H 35,000 Vans H 25,000 100,000 Current Assets Inventory H 15,000 Accounts Receivables H 35,000 Cash and Cash Equivalent H 70,000 120,000 Total Assets 220,000 EQUITY + LIABILITIES Opening Equity 173,000 Retained Earnings 25,485 155,485 LONG-TERM LIABILITIES Loan 2,000 CURRENT LIABILITIES Accounts Payable I 19,515 TOTAL LIABILITIES 64,515 Equity + Total Liabilities 220,000 Notes: A. XYZ Company Limited is targeting a sales growth of 25% to meet growing demand and increase its market share. B. Cost of sales ratio remains unchanged. C. Sales and marketing expenditure is expected to increase in proportion with sales increase. D. Profit margin remains unchanged. E. Interest on loan is 20%. The loan has a maturity period of ten (10) years. F. Corporate tax rate is 25%. G. Dividend pay-out ratio remains unchanged. H. Asset to sales ratios remain unchanged. I. Spontaneous liabilities ratio remain unchanged. J. XYZ Company Limited is currently operating at full capacity. Requirements: 1. Compute the self-supporting growth rate of XYZ Company Limited. 2. Using the relevant sales target, are there any additional funding needs for XYZ Company Limited? Use both formula approach and the pro-forma financial statement approach. 3. If there is the need for additional funds, discuss some of the sources of funds and their implications for the company.