Question
Suppose that Wind Em Corp. currently has the balance sheet shown as follows, and that sales for the year just ended were $15 million. The
Suppose that Wind Em Corp. currently has the balance sheet shown as follows, and that sales for the year just ended were $15 million. The firm also has a profit margin of 23 percent, a retention ratio of 40 percent, and expects sales of $20 million next year. If all assets and current liabilities are expected to grow with sales, what is the necessary increase in assets? Assets Liabilities and Equity Current Assets $ 2,000,000 Current Liabilities $ 2,500,000 Fixed Assets 8,000,000 Long-term Debt 1,500,000 Equity 6,000,000 Total Assets $ 10,000,000 Total Liabilities and Equity $ 10,000,000
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$240,000
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$1,366,957.14
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$3,333,333.33
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$1,840,000
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