Question
Super Fun Toys, Inc., has the following balance sheet: Assets: Current Assets $3,500,000 Fixed Assets 5,100,000 Total Assets$8,600,000 Liability and Equity: Current Liabilities $2,400,000 Long
Super Fun Toys, Inc., has the following balance sheet:
Assets:
Current Assets $3,500,000
Fixed Assets 5,100,000
Total Assets$8,600,000
Liability and Equity:
Current Liabilities $2,400,000
Long Term Debt 2,100,000
Equity 4,500,000
Total Liabilities and Equity
$8,600,000
Suppose Super Fun Toys, Inc., has sales of $8.9 million for the year just ended, the profit margin of the firm is 16 percent with a retention rate of 28 percent, and the firm expects sales of $10.8 million next year. If fixed assets will have to grow by $800,000 to support the sales growth, with current assets and current liabilities expected to grow with sales, what amount of additional funds will Super Fun Toys need from external sources to fund the expected growth?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started