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 (% in Sales) . . 0.10 Cash and securities (days sales cash) . . .15 Accounts Receivable (collection period) . . . 50 Inventories (inventory turnover) . . . 10 Accounts Payable (peyables 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 required, 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

Earning before taxes

TAX

Earning after tax

BALANCE SHEET

Assets

Current Assets

Cash and securities

Accounts Receivables

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

Retain Earnigs . . . . 1500

Total Liabilities and owners equity

External funding required ??????