The Manning Company has financial statements as shown next, which are representative of the companys historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the companys need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales.

Income Statement
Sales	$	220,000
Expenses		158,000
Earnings before interest and taxes	$	62,000
Interest		9,400
Earnings before taxes	$	52,600
Taxes		17,400
Earnings after taxes	$	35,200
Dividends	$	8,800

Balance Sheet
Assets			Liabilities and Stockholders' Equity
Cash	$	5,000	Accounts payable	$	25,700
Accounts receivable		61,000	Accrued wages		2,400
Inventory		77,000	Accrued taxes		4,900
Current assets	$	143,000	Current liabilities	$	33,000
Fixed assets		89,000	Notes payable		9,400
			Long-term debt		27,000
			Common stock		128,000
			Retained earnings		34,600
Total assets	$	232,000	Total liabilities and stockholders' equity	$	232,000

Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit margin and payout ratio must be found from the income statement.) (Do not round intermediate calculations.)

The firm has _________ in surplus funds