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Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the year just ended were $10.2 million. The firm
Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the year just ended were $10.2 million. The firm also has a profit margin of 30 percent, a retention ratio of 20 percent, and expects sales of $8.2 million next year.
Assets | Liabilities and Equity | ||||||
Current assets | $ | 2,124,000 | Current liabilities | $ | 1,707,480 | ||
Fixed assets | 4,200,000 | Long-term debt | 1,600,000 | ||||
Equity | 3,016,520 | ||||||
Total assets | $ | 6,324,000 | Total liabilities and equity | $ | 6,324,000 | ||
If all assets and current liabilities are expected to shrink with sales, what amount of additional funds will Gyp Sum need from external sources to fund the expected growth? (Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign.) |
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