+1-415-670-9189
info@expertsmind.com
If all assets and current liabilities are expected to
Course:- Accounting Basics
Reference No.:- EM13601533




Assignment Help
Assignment Help >> Accounting Basics

Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the year just ended were $10 million. The firm also has a profit margin of 25 percent, a retention ratio of 30 percent, and expects sales of $8 million next year.

Assets Liabilities and Equity

  • Current assets $ 2,000,000 Current liabilities $ 1,500,000
  • Fixed assets 4,000,000 Long-term debt 1,500,000
  • Equity 3,000,000

Total assets $ 6,000,000 Total liabilities and equity $ 6,000,000

If all assets and current liabilities are expected to shrink with sales, what amount of additional funds will Gyp Sum need from external sources to fund the expected growth?




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
What are the implications for the success of conservation measures and policies - What was the most "eye opening" information you learned about droughts? Why did you find it s
If he were to receive an equal salary at the end of each of the 5 years from 2009 to 2014, what would his equivalent annual salary be!
The project will generate positive cash flows of $85,000 a year at the end of each of the next five years. The project's NPV is $100,000 and the company's WACC is 10 percent
Consider that while Chinese and Indian immigrants were arriving in the U.S., the British were arriving in China and India. Compare the concept of a 19th century global economy
Based on Baumol (1952). Money in your savings account earns interest at a 3% annual rate. Each time you go to the bank, you waste 15 minutes in line, and your time is worth
Explain several dimensions of the shareholder-principal conflict with manager agents known as the principal-agent problem. To mitigate agency problems between senior executi
What are the advantages of the four different special journals? When would you use each type? What is a subsidiary ledger and what purpose does it serve?
What worksheet entries are needed in connection with the consolidation of this asset? Assume that the parent applies the partial equity method.