Define external sources to fund the expected growth

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Reference no: EM131793388

Question: Suppose that Psy Ops Industries currently has the balance sheet shown below, and that sales for the year just ended were $5.4 million. The firm also has a profit margin of 20 percent, a retention ratio of 25 percent, and expects sales of $8.4 million next year

Assets			Liabilities and Equity
Current assets	$	2,376,000	Current liabilities	$	1,836,000
Fixed assets		4,200,000	Long-term debt		1,700,000
			Equity		3,040,000
Total assets	$	6,576,000	Total liabilities and equity	$	6,576,000

If fixed assets have enough capacity to cover the increase in sales and all other assets and current liabilities are expected to increase with sales, what amount of additional funds will Psy Ops need from external sources to fund the expected growth? (Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign.)

Reference no: EM131793388

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