Spontaneous liabilities and all assets except fixed asssets

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Reference no: EM131333522

The Booth Company's sales are forecasted to double from $1,000 in 2012 to $2,000 in 2013. Here is the December 31, 2012, balance sheet:

Cash $100 Accounts payable $50

Accounts receivable $200 Notes Payable $150

Inventories $ 200 Accruals $50

Net fixed assets $500 Long-term debt $400

Total assets $1000 Common stock $100

Retained earnings $250

Total liabilities and equity $1000

Booth's fixed assets were used to only 50% of capacity during 2012, but its current assets were at their proper levels in relation to sales. Spontaneous liabilities and all assets except fixed asssets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 4% and its payout ratio to be 45%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar.

Reference no: EM131333522

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