Afn formula to forecast ramey additional

Reference no: EM131812230

Ramey's Calculator sales are expected to increase by 20% from $5 million to $6 million in 2012. Its assets totaled $3 million at the end of 2011. Ramey is at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2011, current liabilities were $2 million, consisting of $500,000 of accounts payable, $500,000 of notes payable, and $500,000 of accruals. The after-tax profit margin is forecasted to be 5%, and the forecasted payout ratio is 60%. Use the AFN formula to forecast Ramey's additional funds needed for the coming year.

Reference no: EM131812230

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