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 $ 240,000 Expenses 181,200 Earnings before interest and taxes $ 58,800 Interest 7,400 Earnings before taxes $ 51,400 Taxes 15,400 Earnings after taxes $ 36,000 Dividends $ 12,600 Balance Sheet Assets Liabilities and Stockholders' Equity Cash $ 6,000 Accounts payable $ 23,300 Accounts receivable 57,000 Accrued wages 1,800 Inventory 81,000 Accrued taxes 3,700 Current assets $ 144,000 Current liabilities $ 28,800 Fixed assets 84,000 Notes payable 7,400 Long-term debt 17,000 Common stock 124,000 Retained earnings 50,800 Total assets $ 228,000 Total liabilities and stockholders' equity $ 228,000

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.)