What is booths additional funds needed for the coming year

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Reference no: EM131376017

The Booth Company's sales are forecasted to increase from $1,000 in 2006 to $2,000 in 2007. Here is the December 31, 2006, balance sheet:

Cash	$100	Accounts Payable	$50
Accounts receivables	200	Notes payable	150
Inventories	200	Accruals	50
Net fixed assets	500	Long-term debt	400
		Common stock	100
		Retained earnings	250
Total assets	$1,000	Total liabilities and equity	$1,000

Booth's fixed assets were used to only 50 percent of capacity during 2006, but its current assets were at their proper levels. All assets except fixed assets increase at the same rate as sales, and fixed assets would also increase at the same rate if the current excess capacity did not exist.

Booth's after-tax profit margin is forecasted to be 5 percent, and its payout ratio will be 60 percent. What is Booth's additional funds needed (AFN) for the coming year?

Reference no: EM131376017

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