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Osato Chemicals Inc. currently has $490,000 in total assets and sales of $1,820,000. Half of Osato's total assets come from net fixed assets, and the
Osato Chemicals Inc. currently has $490,000 in total assets and sales of $1,820,000. Half of Osato's total assets come from net fixed assets, and the rest are current assets. The firm expects sales to grow by 21% in the next year. According to the AFN equation, the amount of additional assets required to support this level of sales is $ Osato was using its fixed assets at only 95% of capacity last year. How much sales could the firm have supported last year with its current level of fixed assets? $1,724,210$2,203,157$1,820,000$1,915,789 When you consider that Osato's fixed assets were being underused, its target fixed assets to sales ratio should be %. When you consider that Osato's fixed assets were being underused, how much fixed assets must Osato raise to support its expected sales for next year? $42,122$32,965$36,628$34,797 The AFN equation and the financial statement-forecasting approach both assume that assets grow at relatively the same rate as sales. However, the relationship between assets and sales is often a little more difficult than that. In particular, some firms use regresion analysis to predict the required assets needed to support a given level of sales. Sirius Cybernetics Corp. has used its historical sales and asset data to estimate the following regression equations: Sirius Cybernetics Corp. currently has sal calculate Sirius Cybernetics Corp.'s foreca $275,623;or accounts receivable and inventories needed to support next year. Based on the next year's accounts receivable and inventory levels predicted by Sirius Cybernetics Corp.'s regression equations, the firm's DSO for next year is expected to be . Use 365 days as the length of a year in all calculations
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