The portion of the necessary increase in assets to support an increase in sales that will...
The portion of the necessary increase in assets to support an increase in sales that will need to be funded from external capital is called
A. capital deficit. B. excess funding requirement. C. funds from operations. D. additional funds needed.
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The portion of the necessary increase in assets to support an
increase in sales that will...
1. Assume sales are currently 100, projected sales are 110, assets that increase spontaneously with sales...
1. Assume sales are currently 100, projected sales are 110, assets that increase spontaneously with sales are 100, liabilities that increase spontaneously with sales are 50, the profit margin is 4% and the payout ratio is 25%. Using the AFN equation, what are the additional funds needed? A. $1.2 B. $1.7 C. $0.7 D. $3.8 2. Assume sales are currently 200, projected sales are 250, assets that increase spontaneously with sales are 800, liabilities that increase spontaneously with sales are...
The Additional Funds Needed (AFN) equation
Green Moose Company has the following end-of-year balance sheet:Green Moose Company Balance Sheet For the Year Ended on December 31AssetsLiabilitiesCurrent Assets:Current Liabilities:Cash and equivalents$150,000Accounts payable$250,000Accounts receivable400,000Accrued liabilities150,000Inventories350,000Notes payable100,000Total Current Assets$900,000Total Current Liabilities$500,000Net Fixed Assets:Long-Term Bonds1,000,000Net plant and equipment$2,100,000Total Debt$1,500,000(cost minus depreciation)Common EquityCommon stock800,000Retained earnings700,000Total Common Equity$1,500,000Total Assets$3,000,000Total Liabilities and Equity$3,000,000The firm is currently in the process of forecasting sales, asset requirements, and required funding for the coming year. In the year that just ended, Green Moose Company generated $350,000 net...
George’s Tech, Inc. (GTI) is a new company the start of which has been internally funded....
George’s Tech, Inc. (GTI) is a new company the start of which has been internally funded. GTI’s owners are projecting significant Sales growth over the next two years, and realize that external funds will be necessary to support that expansion, but they are not sure how much funding will be required. The owners believe that the Additional Funding Needed (AFN) formula and methodology can be adapted to their business model to help them predict asset and funding requirements. Last year’s...
AFN equation Broussard Skateboard's sales are expected to increase by 25% from $9.0 million in 2016...
AFN equation Broussard Skateboard's sales are expected to increase by 25% from $9.0 million in 2016 to $11.25 million in 2017. Its assets totaled $4 million at the end of 2016. Broussard is already at full capacity, so its assets m. end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 5%, and the forecasted payout ratio is 75%. What...
External Financing Needed (EFN) If we need external financing to support and increase in sales, what...
External Financing Needed (EFN) If we need external financing to support and increase in sales, what options are available to organizations? Word Answer:
Green Moose Company Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Assets:...
Green Moose Company Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Assets: Current Liabilities: Cash and equivalents Accounts receivable $150,000 400,000 350,000 $900,000 Inventories Total Current Assets Net Fixed Assets: Net plant and equipment (cost minus depreciation) Accounts payable Accrued liabilities Notes payable Total Current Liabilities Long-Term Bonds Total Debt $250,000 150,000 100,000 $500,000 1,000,000 $1,500,000 $2,100,000 800,000 Common Equity Common stock Retained earnings Total Common Equity Total Liabilities and Equity 700,000 $1,500,000 $3,000,000 Total Assets...
AFN equation Broussard Skateboard's sales are expected to increase by 25% from $8.8 million in 2015...
AFN equation Broussard Skateboard's sales are expected to
increase by 25% from $8.8 million in 2015 to $11.00 million in
2016. Its assets totaled $4 million at the end of 2015. Broussard
is already at full capacity, so its assets must grow at the same
rate as projected sales. At the end of 2015, current liabilities
were $1.4 million, consisting of $450,000 of accounts payable,
$500,000 of notes payable, and $450,000 of accruals. The after-tax
profit margin is forecasted to...
Broussard Skateboard's sales are expected to increase by 15% from $7.0 million in 2016 to $8.05...
Broussard Skateboard's sales are expected to increase by 15% from $7.0 million in 2016 to $8.05 million in 2017. Its assets totaled $5 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 7%,...
3. The Additional Funds Needed (AFN) equation Bohemian Manufacturing Company has the following end-of-year balance sheet:...
3. The Additional Funds Needed (AFN) equation Bohemian Manufacturing Company has the following end-of-year balance sheet: Bohemian Manufacturing Company Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Assets: Current Liabilities: Cash and equivalents $250,000 Accounts receivable $150,000 400,000 350,000 $900,000 Accounts payable Accrued liabilities Notes payable 150,000 Inventories Total Current Assets Net Fixed Assets: Net plant and equipment (cost minus depreciation) Total Current Liabilities Long-Term Bonds Total Debt 100,000 $500,000 1,000,000 $1,500,000 $2,100,000 Common Equity Common...
Broussard Skateboard's sales are expected to increase by 15% from $8.2 million in 2018 to $9.43...
Broussard Skateboard's sales are expected to increase by 15% from $8.2 million in 2018 to $9.43 million in 2019. Its assets totaled $4 million at the end of 2018. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2018, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%,...
AFN equation Broussard Skateboard's sales are expected to increase by 25% from $9.0 million in 2016 to $11.25 million in 2017. Its assets totaled $4 million at the end of 2016. Broussard is already at full capacity, so its assets m. end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 5%, and the forecasted payout ratio is 75%. What...
External Financing Needed (EFN) If we need external financing to support and increase in sales, what options are available to organizations? Word Answer:
Green Moose Company Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Assets: Current Liabilities: Cash and equivalents Accounts receivable $150,000 400,000 350,000 $900,000 Inventories Total Current Assets Net Fixed Assets: Net plant and equipment (cost minus depreciation) Accounts payable Accrued liabilities Notes payable Total Current Liabilities Long-Term Bonds Total Debt $250,000 150,000 100,000 $500,000 1,000,000 $1,500,000 $2,100,000 800,000 Common Equity Common stock Retained earnings Total Common Equity Total Liabilities and Equity 700,000 $1,500,000 $3,000,000 Total Assets...
AFN equation Broussard Skateboard's sales are expected to
increase by 25% from $8.8 million in 2015 to $11.00 million in
2016. Its assets totaled $4 million at the end of 2015. Broussard
is already at full capacity, so its assets must grow at the same
rate as projected sales. At the end of 2015, current liabilities
were $1.4 million, consisting of $450,000 of accounts payable,
$500,000 of notes payable, and $450,000 of accruals. The after-tax
profit margin is forecasted to...
3. The Additional Funds Needed (AFN) equation Bohemian Manufacturing Company has the following end-of-year balance sheet: Bohemian Manufacturing Company Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Assets: Current Liabilities: Cash and equivalents $250,000 Accounts receivable $150,000 400,000 350,000 $900,000 Accounts payable Accrued liabilities Notes payable 150,000 Inventories Total Current Assets Net Fixed Assets: Net plant and equipment (cost minus depreciation) Total Current Liabilities Long-Term Bonds Total Debt 100,000 $500,000 1,000,000 $1,500,000 $2,100,000 Common Equity Common...
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