Explain the after-tax profit margin is forecasted

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Reference no: EM1352398

Broussard Skateboard's sales are expected to increase by 15% from $8 million in 2012 to $9.2 million in 2013. Its assets totaled $5 million at the end of 2012. Borussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2012, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year.

Reference no: EM1352398

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