The Booth Company's sales are forecasted to double from $1,000 in 2019 to $2,000 in 2020. Here is the December 31, 2019, balance sheet:

CASH	$100	ACCOUNTS PAYABLE	$50
ACCOUNTS RECEIVABLE	200	NOTES PAYABLE	150
	200	ACCURALS	50
	500	LONG-TERM DEBT	400
		COMMON STOCK	100
		RETAINED EARNINGS	250
TOTAL ASSETS	$1,000	TOTAL LIABILITIES & EQUITY	$1,000

Booth's fixed assets were used to only 50% of capacity during 2019, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecast to be 5% and its payout ratio to be 60%. What is Booth's additional funds needed (AFN) for the coming year? Also what is the increase factor?

SOLUTION: Hint: Addition to Retained earnings =( Profit Margin )( sales next year )(1-payout ratio )