solution: | |
M=Profit margin | 0.05 |
b=retention ratio | 0.4 |
S0=current level of sales | 4000000 |
A0=current level of asset | 3000000 |
L0= current level of spontaneous liability =200000+100000 | 300000 |
self supporting growth rate (g)= M x b x S0/(A0-L0-M x b x S0) | 3.0534351% |
0.05*0.4*4000000/(3000000-300000-0.05*0.4*4000000) | |
Required increase in sales | 122,137.40 |
4000000*3.0534351% |
Click here to read the book: The AFN Equation SALES INCREASE Paladin Furnishings generated $4 million...
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