Question
WERNER Ltd. wants to forecast its financial requirement for 2020. It's Statement of Financial Position and Income Statement for the year 2019 is presented below.
WERNER Ltd. wants to forecast its financial requirement for 2020. It's Statement of Financial
Position and Income Statement for the year 2019 is presented below. The firm's current sales are
GHc400,000. WERNER Ltd. expects to increase sales by GHc40,000 in 2020, earn a profit margin
on sales of 20 %, and pay 40 % of its earnings out as dividends to its owners. The firm has sufficient
capacity to increase sales to US$440,000 without requiring additional fixed assets. WERNER Ltd.
believes that all current assets and all current liabilities apart from current portions of long-term
borrowings vary directly with sales. 50% of sales are usually on credit and the value of opening
stock at the begining of 2019 was 6,000.
i. Determine the External financing needs of WERNER Ltd.
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Intermediate Accounting
Authors: kieso, weygandt and warfield.
14th Edition
9780470587232, 470587288, 470587237, 978-0470587287
