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	$	210,000
Expenses		151,900
Earnings before interest and taxes	$	58,100
Interest		9,300
Earnings before taxes	$	48,800
Taxes		17,300
Earnings after taxes	$	31,500
Dividends	$	9,450

Balance Sheet
Assets			Liabilities and Stockholders' Equity
Cash	$	4,000	Accounts payable	$	22,200
Accounts receivable		56,000	Accrued wages		2,350
Inventory		66,000	Accrued taxes		4,850
Current assets	$	126,000	Current liabilities	$	29,400
Fixed assets		88,000	Notes payable		9,300
			Long-term debt		26,500
			Common stock		127,000
			Retained earnings		21,800
Total assets	$	214,000	Total liabilities and stockholders' equity	$	214,000

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?

(Is the answer that I am needing)

The firm

needs

in external funds.

Hint****** the answer is not $31290.