Compute the number of common stock shares outstanding

Reference no: EM131770601

Qusetion: Conn Man's Shops, Inc., a national clothing chain, had sales of $400 million last year. The business has a steady net profit margin of 9 percent and a dividend payout ratio of 25 percent. The balance sheet for the end of last year is shown below.

Balance Sheet End of Year (in $ millions)
Assets			Liabilities and Stockholders' Equity
Cash	$	30	Accounts payable	$	71
Account receivable		45	Accrued expenses		50
Inventory		87	Other payables		63
			Common stock		60
Plant and equipment	$	118	Retained earnings	$	36
Total assets	$	280	Total liabilities and shareholders' equity	$	280

The firm's marketing staff has told the president that in the coming year there will be a large increase in the demand for overcoats and wool slacks. A sales increase of 20 percent is forecast for the company.

All balance sheet items are expected to maintain the same percent-of-sales relationships as last year, * except for common stock and retained earnings. No change is scheduled in the number of common stock shares outstanding, and retained earnings will change as dictated by the profits and dividend policy of the firm. (Remember the net profit margin is 9 percent.)

This included fixed assets as the firm is at full capacity.

(a) Will external financing be required for the company during the coming year?

Yes

(b) What would be the need for external financing if the net profit margin went up to 10.50 percent and the dividend payout ratio was increased to 65 percent? (Enter your answer in dollars not in millions. Omit the "tiny_mce_markerquot; sign in your response.)

Required new funds $

Reference no: EM131770601

Questions Cloud

Define domestic violence child abuse and elder abuse : Define domestic violence, child abuse, and elder abuse? What characteristics would lead a healthcare provider to suspect domestic violence and child abuse.

Prepare all the entries relative to sales of soap powder : Concord Company includes 1 coupon in each box of soap powder that it packs, and 10 coupons are redeemable for a premium (a kitchen utensil).

Find the tobin and nordhaus measure of economic welfare : Find the Tobin and Nordhaus measure of economic welfare if GDP is $8 trillion, the economic bads are $600 billion.

Write a paper about planned parenthood funding : Write a paper about Planned Parenthood funding. Submit a paper between 7-10 pages long excluding title page and reference pages.

Compute the number of common stock shares outstanding : Conn Man's Shops, Inc., a national clothing chain, had sales of $400 million last year. The business has a steady net profit margin of 9 percent.

Discuss what is the amount manning will receive on the sale : Denver National Bank, which demands interest on the note of 10% compounded semiannually. What is the amount Manning will receive on the sale of the note

How are fixed and variable costs associated : How are fixed and variable costs associated with manufacturing and sales cost of Tesla Motors production? Source?

Current cost of goods sold : What is considered to be current cost of goods sold and what about profitability for Tesla Motors Model S? Source?

Develop and run a create function statement : Create a procedure named DDPAY_SP that identities whether a donor currently has an active pledge with monthly payments. A donor ID is the input to the procedure

User Account

All Pages