Suppose that Psy Ops Industries currently has the balance sheet shown below, and that sales for the year just ended were $5.6 million. The firm also has a profit margin of 25 percent, a retention ratio of 30 percent, and expects sales of $8.6 million next year. Assets Current assets. Fixed assets Total assets Liabilities and Equity Additional funds needed $ 2,576,000 Current liabilities 4,300,000 Long-term debt Equity $ 6,876,000 Total liabilities and equity $ 2,016,000 1,800,000 3,060,000 $ 6,876,000 If fixed assets have enough capacity to cover the increase in sales and all other assets and current liabilities are expected to increase with sales, what amount of additional funds will Psy Ops need from external sources to fund the expected growth? Note: Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign.
Suppose that Psy Ops Industries currently has the balance sheet shown below, and that sales for the year just ended were $5.6 million. The firm also has a profit margin of 25 percent, a retention ratio of 30 percent, and expects sales of $8.6 million next year. Assets Current assets. Fixed assets Total assets Liabilities and Equity Additional funds needed $ 2,576,000 Current liabilities 4,300,000 Long-term debt Equity $ 6,876,000 Total liabilities and equity $ 2,016,000 1,800,000 3,060,000 $ 6,876,000 If fixed assets have enough capacity to cover the increase in sales and all other assets and current liabilities are expected to increase with sales, what amount of additional funds will Psy Ops need from external sources to fund the expected growth? Note: Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter21: Supply Chains And Working Capital Management
Section: Chapter Questions
Problem 13P: Payne Products had $1.6 million in sales revenues in the most recent year and expects sales growth...
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