The Minoso Corporation anticipates a 20 percent increase in sales for 2014 over its 2013 level. Minoso is currently operating at full capacity and thus expects to increase its investment in both current and fixed assets in order to support the increase in forecasted sales.
Minoso Corporation
Income Statement for December 31, 2013
(Thousands of Dollars)
Sales..............................$15,000
Operating expenses.............-13,000
EBIT................................2,000
Interest................................400
EBT.................................1,600
Taxes (40%)..........................640
Net income............................960
Cash dividends (40%)...............384
Added retained earnings..........$576

A. Estimate Minoso's sustainable sales growth rate based on the financial data relationships for 2013. In making your estimate, calculate each component of the firm's operating performance and financial policies.
B. Estimate the additional funds needed (AFN) for 2013 using the formula or equation method that is based on constant "percent of sales" relationships.
C. Briefly describe differences in calculation assumptions between Part A and Part B.

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Balance Sheet as of December 31,2013 (Thousands of Dollars) Cash Accounts receivable Inventories Accounts payable Bank Loan Accrued liabilities $1,000 2,000 2,200 5,200 S 1,600 1,800 1.200 4,600 2,200 2,400 2,800 Total current assets Total current liabilities Long-term debt Common stock Retained eamings Total liabilities & equity Fixed assets, net 6,800 Total assets