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

Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
1. Briefly state Adam Smith's four requirements for a good tax system. 2. Based on the discussion in the chapter, evaluate how well each of these taxes meets Adam Smith's four
Describe the classification of expenditures as those that are related to a taxpayer's trade or business, those for the production of income, and those for personal use. 2
From the following balances relating to the accounts of a small football club as at 31 March 20X8 draw up the income and expenditure account and the statement of financial p
On January 30, Lift Time Corporation, a wholesaler of hydraulic lifts, acquired land in exchange for 18,000 shares of $10 par common stock with a current market price of $15.
Your hospital has the following revenue for the months of July-September: July $2,000,000 August $3,000,000 September $4,000,000. If 30% of the month's revenue is collected
Assume the 2015 ending inventory of Shea's Shrimp Shack was understated by $ 10,000. Explain how this error would affect the amounts reported for cost of goods sold and gross
Suppose a large aerospace engineering firm has immediately hired you as a consultant to investigate a potential violation of corporate policy and data theft. You have been i
briefly review the article (in four or five sentences) and then comment on how the article relates to bonds. The CSU-Global Library is a great place to find articles. Includ