External sources to fund the expected growth

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Reference no: EM131456827

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 $9.8 million next year. If all assets and current liabilities are expected to grow with sales, what amount of additional funds will fun toys need from external sources to fund the expected 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: EM131456827

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