The Manninig Company has financial statements as shown next, which are representative of the company's historical avarage.The firm is expecting a 35 percent increase in sales next year, and management is concerned about the company's need for external funds. The ncrease 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 250,000

Expenses 192,000

Earning before interest and taxes 58,00

Interest 7,000

Earning before income tax 50500

Taxes 15,000

Earnings after taxes 35,000

Dividends 7,000

Balance Sheet

Assets Liabilities and Shareholders Equity

Cash 8500 Accounts payables 26,400

Accounts Receivables 63,000 Accrued wages 2,350

Inventory 91,000 Accrued taxes 3,750

Current Assets 162,500 Current Liabilities 32,500

Fixed Assets 85,000 Notes payable 7,500

Long term debt 17,500

Retained Earnings 65,000

Total Assets 247,500 Total Liabilitie and Owners Equity 247,500

Using the point of sales method, determine whether the company has external financing needs, or a surp