Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year end is

image text in transcribed
Owen's Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current habilities will vary directly with sales. The firm is working at full capacity Balance Sheet (in millions) Assets Liabilities and Stockholders' Equity $ 25 Cash $ 12 Accounts payable Accounts receivable 30 Accrued wages Inventory 33 Accrued taxes Current assets $ 75 Current liabilities Fixed assets 50 Notes payable 20 Common stock Retained earnings Total assets $ 125 Total 11abilities and stockholders' equity $ 125 12 18 $ 55 25 25 Owen's Electronics has an aftertax profit margin of 10 percent and a dividend payout ratio of 40 percent. Il sales grow by 25 percent next year, determine how many dollars of new funds are needed to finance the growth. (Do not round intermediate calculations. Enter your answer in dollars, not millions, (e.g., $1,234,567).) New funds

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

More Books

Students also viewed these Finance questions

Question

HOW MANY TOTAL WORLD WAR?

Answered: 1 week ago

Question

Discuss the scope of financial management.

Answered: 1 week ago

Question

Discuss the goals of financial management.

Answered: 1 week ago