Question
X Company's balance sheet showed the following amounts as of December 31st: Cash $ 10 Accounts payable $ 15 Accounts receivable 40 Accruals 5 Inventory
X Company's balance sheet showed the following amounts as of December 31st: Cash $ 10 Accounts payable $ 15 Accounts receivable 40 Accruals 5 Inventory 50 Notes payable 20 Net fixed assets 100 Long-term debt 20 Common stock 20 Retained earnings 120 Total assets $200 Total liabilities and equity $200 Last year the firm's sales were $2,000. The company operated its fixed assets at 80 percent of capacity during the year. The company expects to increase next year's sales by 37.5 percent, to $2,750, the profit margin is expected to be 3 percent, and the dividend payout ratio is expected to be 60 percent. What are the companys additional funds needed (AFN) for next year? Use the pro-forma balance sheet method (include all entries). Profit margin = NI/Sales
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