Estimate the company need for funding

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Sardine Canneries Ltd is planning for the financial year starting March 2019 and wants to estimate the funds they will require. The company has total assets of R85 million, total liabilities of R25 million, sales of R225 million with a net profit margin of 5% and a dividend pay-out ration of 60%. The company expects sales of R250 million in the coming year. All assets and liabilities are considered spontaneous and will increase in line with sales. However, in the coming year the firm will also have to spend and additional R15 million on new labeling machines while its canning machines are operating at only 90% of capacity. All unused capacity on the canning machines first needs to be utilised before more cans could be bought. Assume all assets i 2018 were canning machines

Estimate the company's need for funding for the coming year

Reference no: EM132783324

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