Compute additional funds needed

Assignment Help Finance Basics

Reference no: EM1358832

The Candy Company sales are forecasted to increase from $1000 in 2005 to
$2000 in 2006. Here is the December 31, 2005, balance sheet:

Cash $100 Accounts payable $50
Accounts receivable $200 Notes payable $150
Inventories $200 Accruals $50
Current assets $500 Current liabilities $250
Net fixed assets $500 Long term debt $400
Common stock $100
Retained earnings $250

Total assets $1000 Total liabilities and equity $1000

The company's fixed assets were used to only 50 percent of capacity during 2005, but its current assets were at their proper levels. All assets except fixed assets increase at the same rate as sales, and fixed assets would also increase at the same rate if the current excess capacity did not exist. The company after-tax profit margin is forecasted to be 5 percent, and its payout ratio will be 60 percent. What is the company's additional funds needed (AFN) for the coming year? Ignore financing feedback effects.

Reference no: EM1358832

Questions Cloud

Queuing : In a typical 8 hour work day, how much time in total will the cashier be idle? How many customers on average are waiting in line to pay?

Lean materials management : Analyze these relationships and provide examples from professional experience and/or text examples to support your views.

Buyer and seller negotiation - debriefing meeting : Have you ever made a major purchase and had a debriefing following the transaction? If so, what occurred in that meeting?

Explain it surprising that the company revenue increased : Explain it surprising that the company's revenue increased when it decreased the average selling price of its phones.

Compute additional funds needed : The corporation's fixed assets were used to only 50% of capacity during 2005, but its current assets were at their proper levels. All assets except fixed assets rise at the same rate as sales,

Research - continuous quality assurance : Research the continuous quality assurance efforts within a healthcare facility other than in hospitals

Explain once the budget has been prepared by the various : Explain Once the budget has been prepared by the various agencies and it is often moved forward to the legislative body for authorization

What is the maximum speed of the mass : What is the maximum speed of the mass. What is the radial acceletation experience by mass while it remains at its max. angular speed.

Statistcal process control : If no values are outside of the control limits, what are the implications for the business and what would you recommend they do?

User Account

All Pages