What is the amount of external funding required

Assignment Help Financial Accounting

Reference no: EM132651882

Previous Years

Sales 1400 Retained Earnings 170

Costs 900 Dividends 180

Tax rate 0.3

Assets Liabilities/Equity

Current Assets Current Liabilities

Cash 460 Creditors 600

Debtors 540 Short Term Notes 100

Inventory 600

Non-Current Assets Non-Current Liabilities

PP&E 2000 Debentures 900

Total Assets 3600

Owner's Equity

Retained Profits 1000

Ordinary Shares 1000

Percentage of Sales Approach - Assume all spontaneous variables move as a percentage of sales.

Question a) Given an expected increase in sales of 12%, what is the amount of external funding required?

Question b) To maintain the current debt/equity ratio how much debt and how much equity is required?

Question c) Assuming the company is only operating at 95% capacity, how much new funding (if any) is required?

Reference no: EM132651882

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