Calculate beta company discretionary financing needs

Reference no: EM131488800

Question: Financial forecasting-percent of sales) Beta Corporation is making plans for the next fiscal year. Beta's current sales are $3.5 million, expected to increase to $5 million, based on current assets of $2.4 million and fixed assets of $2.5 million. In the following year Beta decided to increase fixed assets by $0.5 million, current assets and accounts payable vary with direct proportion of sales. Currently, the company has accounts payable of $620,000; its long-term debt is $0.5 million (due in 3 years), common equity is $1 million and retained earnings are $0.25 million. The net profit margin for Beta is 5 percent and the company plans to pay $0.25 million as dividends

a. Calculate Beta company's financial needs for the next year.

b. Calculate Beta company's discretionary financing needs.

c. Estimate the sales amount in which Beta will not need additional funding, that is, where discretionary financing needs (DFN) is 0.

Reference no: EM131488800

Questions Cloud

Write the internal influences based on the given case : Write the internal influences (memory and personality), based on the case. Each 3 sentences. No hard words.

What are sambonoza financing requirements : (Financial forecasting-discretionary financing needs) Sambonoza Enterprises projects its sales next year to be $4 million and expects to earn 5 percent.

Erp implementation in the middle east region : Write a research article after conducting an exploratory study on ERP implementation in the Middle East Region(i choose omantel and Saudi copmanies).

Expand business operations to your neighboring state : You are the Chief Human Resource Officer (CHRO) at your organization. As the CHRO, one of your primary roles is to be the workforce strategist.

Calculate beta company discretionary financing needs : Financial forecasting-percent of sales) Beta Corporation is making plans for the next fiscal year. Beta's current sales are $3.5 million, expected to increase.

Employee benefits in the past year : Where are you from? How many times have you used your employee benefits in the past year?

Mobile commerce (m-commerce) is based on the : Which of the following geographic objects of a GIS is most likely used to show the location of an airport?

Conduct an external and internal analysis : Conduct an external and internal analysis for both Delta Airlines and Tesla using concepts from this course. Strategic management is the course name 1.200 words

What is a need for nee financing : Percent of sales forecasting) Which of the following accounts would most likely vary directly with the level of a firm's sales? Discuss each briefly.

User Account

All Pages