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The Manning Company has financial statements as shown next, which are representative of the company s historical average. The firm is expecting a 3 0
The Manning Company has financial statements as shown next, which are representative of the companys historical average. The firm is expecting a 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 $
Expenses
Earnings before interest and taxes $
Interest
Earnings before taxes $
Taxes
Earnings after taxes $
Dividends $
Balance Sheet
Assets Liabilities and Stockholders' Equity
Cash $ Accounts payable $
Accounts receivable Accrued wages
Inventory Accrued taxes
Current assets $ Current liabilities $
Fixed assets Notes payable
Longterm debt
Common stock
Retained earnings
Total assets $ Total liabilities and stockholders' equity $
Using the percentofsales 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.
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