External sources to fund the expect growth

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Reference no: EM131456820

Suppose Super Fun toys has sales of $8.9 million for the year just ended, the profit margin of the firm is 16 percent with a retention rate of 28 percent, and the firm expects sales of $10.8 million next year. If fixed assets will have to grow by $800,000 to support the sales growth, with current assets and current liabilities expected to grow with sales, what amount of additional funds will super fun toys need from external sources to fund the expect growth?

Assets Liabilities and Equity

Current assets $3,500,000 Current liabilities $2,400,000

Fixed assets $5,100,000 Long term debt $2,100,000

Equity $4,500,000

Total assets $8,600,000 Total liabilities & equity $8,600,000

Reference no: EM131456820

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