Suppose that ABC organization's current Sales = 20,000. Also, suppose ABC has forecast the following values:

Costs of goods sold (% of sales)		0.85
General, selling, and administrative expenses (% of Sales)	0.10
Cash and securities (days sales cash)		15
Accounts receivable (collection period)		50
Inventories (inventory turnover)		10
Accounts payable (payables period)		60

Where days sales cash = cash / (sales/day), the collection period = AR / (sales/day), and the payables period = AP / (cost of sales/day).

Complete the template below before solving for the additional funds, or the external funding, needed to finance a 30% increase in sales.

Income Statement
Sales
Cost of goods sold
Gross profit
Expenses:
General, selling, and administrative expenses
Net interest expense	100
Earnings before taxes
Tax
Earnings after tax
Balance Sheet
Assets
Current assets:
Cash and securities
Accounts receivable
Inventories
Prepaid expenses	20
Total current assets
Net fixed assets	300
Total assets
Liabilities and owners' equity
Current liabilities
Bank loan	0
Accounts payable
Current portion of long-term debt	100
Accrued wages	30
Total current liabilities
Long-term debt	700
Common stock	150
Retained earnings	1500
Total liabilities and owners' equity
External funding required	???

Suppose that ABC organization's current Sales = 20,000. Also, suppose ABC has forecast the following values: Costs of goods sold (% of sales) General, selling, and administrative expenses (% of Sales) 0.85 0.10 Cash and securities (days sales cash) 15 Accounts receivable (collection period) 50 Inventories (inventory turnover) 10 Accounts payable (payables period) 60 Where days sales cash = cash / (sales/day), the collection period = AR / (sales/day), and the payables period = AP / (cost of sales/day). Complete the template below before solving for the additional funds, or the external funding, needed to finance a 30% increase in sales. Income Statement Sales Cost of goods sold Gross profit Expenses: General, selling, and administrative expenses Net interest expense 100 Earnings before taxes Tax Earnings after tax Balance Sheet Assets Current assets: Cash and securities Accounts receivable Inventories Prepaid expenses Total current assets 20 Net fixed assets 300 Total assets Liabilities and owners' equity Current liabilities Bank loan Accounts payable Current portion of longterm debt 0 100 Accrued wages Total current liabilities 30 Longterm debt 700 Common stock 150 Retained earnings 1500 Total liabilities and owners' equity External funding required