The booth companys sales are forecasted to increase from

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The Booth Company"s sales are forecasted to increase from $1,000 in 2002 to $2,000 in 2003. Here is the December 31, 2002, 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



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 2002, 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: EM13572868

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