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	$	210,000
Expenses		154,100
Earnings before interest and taxes	$	55,900
Interest		8,200
Earnings before taxes	$	47,700
Taxes		16,200
Earnings after taxes	$	31,500
Dividends	$	9,450

Balance Sheet
Assets			Liabilities and Stockholders' Equity
Cash	$	9,500	Accounts payable	$	20,100
Accounts receivable		40,000	Accrued wages		1,800
Inventory		66,000	Accrued taxes		3,300
Current assets	$	115,500	Current liabilities	$	25,200
Fixed assets		92,000	Notes payable		8,200
			Long-term debt		21,000
			Common stock		116,000
			Retained earnings		37,100
Total assets	$	207,500	Total liabilities and stockholders' equity	$	207,500

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.)