### Grow in proportion to projected sales

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##### Reference no: EM13971957

Carter Corporation's sales are expected to increase from \$5 million in 2012 to \$6 million in 2015, or by 20%. Its assets totaled \$3 million at the end of 2014. Carter is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2014, current liabilities are \$1 million, consisting of \$250,000 of accounts payable, \$500,000 of notes payable, and \$250,000 of accrued liabilities. Its profit margin is forecasted to be 4%, and the forecasted retention ratio is 25%. Use the AFN equation to forecast the additional funds Carter will need for the coming year.

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