Question
The Growth Company's sales are forecasted to triple from $1,000 in 2022 to $3,000 in 2023. Here is December 31, 2022's balance sheet: Cash $
The Growth Company's sales are forecasted to triple from $1,000 in 2022 to $3,000 in 2023. Here is December 31, 2022's balance sheet:
Cash | $ 100.00 | Accts.Payable | $ 50.00 | |
Acct. Rec. | $ 200.00 | Notes Payable | $ 150.00 | |
Inventories | $ 200.00 | Accruals | $ 50.00 | |
Current Assets | $ 500.00 | Current Liabilities | $ 250.00 | |
Net Fixed Assets | $ 500.00 | Long Term Debt | $ 400.00 | |
Total Assets | $ 1,000.00 | Total Liabilities | $ 650.00 | |
Common Stock | $ 100.00 | |||
Retained Earnings | $ 250.00 | |||
Equity | $ 350.00 | |||
Total Liab.&Equity | $ 1,000.00 |
Growths fixed assets were used to only 50% of capacity during 2022, but the current assets were all 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 have to also increase at the same rate as sales if the current excess capacity did not exist. Growth's after-tax profit margin is forecasted to be 5% and its payout ratio to be 40%. What is Growth's additional funds needed (AFN) for the coming year? Enter your answer rounded to two decimal places.
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