The Manning Company has financial statements as shown next, which are representative of the companys historical average. The firm is expecting a 40 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	$	300,000
Expenses		246,800
Earnings before interest and taxes	$	53,200
Interest		9,100
Earnings before taxes	$	44,100
Taxes		17,100
Earnings after taxes	$	27,000
Dividends	$	5,400

Balance Sheet
Assets			Liabilities and Stockholders' Equity
Cash	$	9,000	Accounts payable	$	29,000
Accounts receivable		56,000	Accrued wages		2,250
Inventory		70,000	Accrued taxes		4,750
Current assets	$	135,000	Current liabilities	$	36,000
Fixed assets		86,000	Notes payable		9,100
			Long-term debt		25,500
			Common stock		125,000
			Retained earnings		25,400
Total assets	$	221,000	Total liabilities and stockholders' equity	$	221,000

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.)