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	$	200,000
Expenses		149,600
Earnings before interest and taxes	$	50,400
Interest		9,200
Earnings before taxes	$	41,200
Taxes		17,200
Earnings after taxes	$	24,000
Dividends	$	6,000

Balance Sheet
Assets			Liabilities and Stockholders' Equity
Cash	$	6,000	Accounts payable	$	22,900
Accounts receivable		55,000	Accrued wages		2,300
Inventory		69,000	Accrued taxes		4,800
Current assets	$	130,000	Current liabilities	$	30,000
Fixed assets		87,000	Notes payable		9,200
			Long-term debt		26,000
			Common stock		126,000
			Retained earnings		25,800
Total assets	$	217,000	Total liabilities and stockholders' equity	$	217,000

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