Suppose that Wall-E Corporation currently has the balance sheet shown below, and that sales for the year just ended were $7.9 million. The firm also has a profit margin of 25 percent and a retention ratio of 30 percent and expects sales of $9.9 million next year. Fixed assets are currently fully utilized, and the nature of Wall-E's fixed assets is such that they must be added in $1 million increments. Assets Current assets $ 2,844,000 Fixed assets Liabilities and Equity 5,214,000 Current liabilities Long-term debt Equity $ 2,133,000 1,950,000 3,975,000 Total assets $ 8,058,000 Total liabilities and equity $ 8,058,000 If current assets and current liabilities are expected to grow with sales, what amount of additional funds will Wall-E need from external sources to fund the expected growth? Note: Enter your answer in dollars not in millions. Round your answer to the nearest whole dollar. Additional funds needed

Suppose that Wall-E Corporation currently has the balance sheet shown below, and that sales for the year just ended were $7.9 million. The firm also has a profit margin of 25 percent and a retention ratio of 30 percent and expects sales of $9.9 million next year. Fixed assets are currently fully utilized, and the nature of Wall-E's fixed assets is such that they must be added in $1 million increments. Assets Current assets $ 2,844,000 Fixed assets Liabilities and Equity 5,214,000 Current liabilities Long-term debt Equity $ 2,133,000 1,950,000 3,975,000 Total assets $ 8,058,000 Total liabilities and equity $ 8,058,000 If current assets and current liabilities are expected to grow with sales, what amount of additional funds will Wall-E need from external sources to fund the expected growth? Note: Enter your answer in dollars not in millions. Round your answer to the nearest whole dollar. Additional funds needed

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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Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Stricklers sales last year were 3,250,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 6.0 times during the year, and its DSO was 41 days. Its annual cost of goods sold was 1,800,000. The firm had fixed assets totaling 535,000. Stricklers payables deferral period is 45 days. a. Calculate Stricklers cash conversion cycle. b. Assuming Strickler holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. c. Suppose Stricklers managers believe the annual inventory turnover can be raised to 9 times without affecting sale or profit margins. What would Stricklers cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 9 for the year?
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