The Manning Company has financial statements as shown next, which are representative of the company's historical average.

The firm is expecting a 35 percent increase in sales next year, and management is concerned about the company's 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.

The Manning Company has financial statements as shown next , which are representative of the company's historical average* The firm is expecting a 35 percent increase in sales next year , and management is concerned about the company's 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 $ 290, 000 Expenses 225, 600 Earnings before interest and taxes $ 6.4,400 Interest 7. 900 Earnings before taxes $ 56. 500 Taxes 15.900 Earnings after taxes* $ 40, 600 Dividends $ 12, 180 Balance Sheet ASSETS 7,000 Liabilities and Stockholders " Equity* Cash $ Accounts payable* 25. 900 Accounts receivable 60,000 Accrued wages 1. 650 Inventory* 78, 000 Accrued taxes 4, 350 Current assets $ 145, 0010 Current liabilities 31, 900 Fixed assets 89, 000 Notes payable 7. 900 Long-term debt 19. 500 Common stock 129, 000 Retained Earnings* 45, TOO Total assets $ 234 , 000 Total liabilities and stockholders " equity $ 234, 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 needs }in external funds