The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 25 percent increase in sales next year, and management is concerned about the company's 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 Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends 300,000 231,000 $ 69,000 8,000 61,000 16,000 $ 45,000 $ 13,500 Balance Sheet Assets Liabilities and Stockholders' Equity Cash Accounts receivable Inventory S 5,000 Accounts payable 81,000 Accrued wages 79,000 Accrued taxes $ 165,000 Current liabilities 90,000 Notes payable S 29,900 1,700 4,400 S 36,000 8,000 20,000 130,000 61,000 $ 255,000 Current assets Fixed assets Long-term debt Common stock Retained earnings Total assets 255,000 Total liabilities and stockholders' equity 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 in surplus funds