The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Income Statement Sales $220,000 Expenses Earnings before interest and taxes 158,000 $ 62,000 9,400 $ 52,600 17,400 $ 35,200 Interest Earnings before taxes Тахes Earnings after taxes Dividends $ 8,800 Balance Sheet Assets Liabilities and Stockholders' Equity $ 25,700 $ 5,000 Accounts payable 61,000 Accrued wages 77,000 Accrued taxes $143,000 89,000 Notes payable Cash Accounts receivable Inventory Current assets Fixed assets 2,400 4,900 $ 33,000 Current liabilities Long-term debt Common stock Retained earnings 9,400 27,000 128,000 34,600 $232,000 Total liabilities and stockholders' equity $232,000 Total assets Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit margin and payout ratio must be found from the income statement.) (Do not round intermediate calculations.) The firm
The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Income Statement Sales $220,000 Expenses Earnings before interest and taxes 158,000 $ 62,000 9,400 $ 52,600 17,400 $ 35,200 Interest Earnings before taxes Тахes Earnings after taxes Dividends $ 8,800 Balance Sheet Assets Liabilities and Stockholders' Equity $ 25,700 $ 5,000 Accounts payable 61,000 Accrued wages 77,000 Accrued taxes $143,000 89,000 Notes payable Cash Accounts receivable Inventory Current assets Fixed assets 2,400 4,900 $ 33,000 Current liabilities Long-term debt Common stock Retained earnings 9,400 27,000 128,000 34,600 $232,000 Total liabilities and stockholders' equity $232,000 Total assets Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit margin and payout ratio must be found from the income statement.) (Do not round intermediate calculations.) The firm
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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Transcribed Image Text:The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm
is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds.
The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset
utilization in the existing store. Among liabilities, only current liabilities vary directly with sales.
Income Statement
Sales
$220,000
158,000
$ 62,000
9,400
$ 52,600
17,400
$ 35,200
Expenses
Earnings before interest and taxes
Interest
Earnings before taxes
Тахes
Earnings after taxes
Dividends
$ 8,800
Balance Sheet
Assets
Liabilities and Stockholders' Equity
$ 5,000
61,000 Accrued wages
77,000 Accrued taxes
Cash
$
Accounts payable
$ 25,700
Accounts receivable
2,400
4,900
$ 33,000
9,400
Inventory
$143,000
89,000 Notes payable
Current assets
Current liabilities
Fixed assets
Long-term debt
Common stock
27,000
128,000
Retained earnings
34,600
Total assets
$232,000 Total liabilities and stockholders' equity
$232,000
Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit
margin and payout ratio must be found from the income statement.) (Do not round intermediate calculations.)
The firm
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