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How do determine the amount of financing

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Reference no: EM132646150

Sabaq Corporation wants to determine the additional funds needed for its forecasted sales in the coming year. The forecasted financial information are as follows:

Expected sales is RM550,000,000
Operating profit margin is forecasted at 7 percent of sales
Interest expense is expected to be RM450,000
Tax rate is expected to remain at 28 percent
Dividend payout ratio is 40 percent
Increase in working capital is forecasted at 6 percent of sales
Increase in fixed assets is expected to be 8 percent of sales
New equity to be issued is 60 percent of funds required

Problem 1: Given the above information, determine the amount of financing needed by Sabaq Corporation.

Reference no: EM132646150

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