Thibodaux's Wonderful World of Boudin is already at full capacity so any plans to expand production will require growth in assets at the same rate as projected sales. Thibodaux's sales are expected to increase by 20% from $10 million in 2021 to $12 million in 2022. Historical, Thibodaux's has maintained a profit margin of 8% and expects that to continue into the future.

At the end of 2021, current liabilities were $4 million. This consisted of $2,500,000 of notes payable, $1 million of accounts payable, and $500,000 of accruals. Current assets included $1,000,000 in cash, $2,000,000 in accounts receivable, and $3,000,000 in inventory. Total assets of the firm were last recorded at $9,000,000. (Hint: we care about spontaneous liabilities versus non-spontaneous. We do NOT make a similar distinction with assets.)

Based on past dividend policy, Thibodaux's is expected to have a payout ratio of 20%. Use the AFN equation to forecast Thibodaux's additional funds needed for the coming year.