Question No. 2: Problem (O2, O3 & 04) [10 Marks]

Sohar Video Products sales are expected to increase from OMR (10) million in 2020 to OMR (12) million in 2021. Asset turnover generated in the 2020 of (2.5) times. Sohar Company is already at full capacity, so its assets must grow at the same rate as projected sales.

At the end of 2019, current liabilities were OMR (2) million, the net profit was OMR (30) thousand, and the dividend payout ratio was 20%. Suppose the net profit margin and dividend payout ratio will hold the same percentage in 2021.

Is Sohar company needs fund from external or internal to finance the new sales in 2020? And why. (Note: - Kindly mention the equations that are related)