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The Manning Company has financial statements as shown next, which are representative of the company's historical average. The turm is expecting a 40 percent increase in sales next year, and management is concerned about the company's need for external funds The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store Among liabilities, only current liabilities vary directly with sales Income statement $270.000 Expenses 203,400 Earnings before interest and taxes $ 66,600 Interea 7.700 Earnings before taxes 5.900 Taxe 25700 Earnings after taxes 43,200 Dividende 19 ook int rences Assets Cash Accounts receivable Inventory Current assets Fixed assets Balance Sheet Liabilities and stockholderat quity $7,500 Accounts payable $29.000 23.000 Acorded wages 70,000 Acorded taxes 250 2140, 500 Current States 535100 17.000 star payable -7.700 Long-ter det 10.500 Common cook 127.000 Notaired emings 47,200 $235.500 Total liabilities and bookhelder equity $235.500 Total Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds (Hint A profit margin and payout ratio must be found from the income statement.) (Do not round intermediate calculations.) TV The fire needs internal funds Income Statement Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Earnings after taxes Dividends $270,000 203, 400 $ 66, 600 7,700 $ 58,900 15,700 $ 43,200 $ 17,280 Assets Cash Accounts receivable Inventory Curxent assets Faxed assets Balance Sheet Liabilities and Stockholders Equity $ 7,500 Accounts payable $ 29,000 71,000 Accrued wages 1,850 70,000 Acerued taxes 4,250 $148,500 Current liabilities $ 35, 100 87,000 Notey payable 7,700 Long-term debe 18,500 Common stock 127,000 Retained earning 47,200 $235,600 Total Labileuses and stockholders' equity $235,500 TOCassets