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	$	280,000
Expenses		222,800
Earnings before interest and taxes	$	57,200
Interest		7,800
Earnings before taxes	$	49,400
Taxes		15,800
Earnings after taxes	$	33,600
Dividends	$	6,720

Balance Sheet
Assets			Liabilities and Stockholders' Equity
Cash	$	5,000	Accounts payable	$	22,100
Accounts receivable		86,000	Accrued wages		1,600
Inventory		77,000	Accrued taxes		4,300
Current assets	$	168,000	Current liabilities	$	28,000
Fixed assets		88,000	Notes payable		7,800
			Long-term debt		19,000
			Common stock		128,000
			Retained earnings		73,200
Total assets	$	256,000	Total liabilities and stockholders' equity	$	256,000

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.)