Fixed assets will remain at their current level

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Reference no: EM13814047

Sambonoza Enterprises projects its sales next year to be $5 million and expects to earn 5 percent of that amount after taxes. The firm is currently in the process of projecting its financing needs and has made the following assumptions (projections):

1. Current assets will equal 26 percent of sales, and fixed assets will remain at their current level of $1 million.

2. Common equity is currently $0.7 million, and the firm pays out half of its after-tax earning in dividends.

3. The firm has short-term payable and trade credit that normally equal 9 percent of sales, and it has no long-term debt outstanding.

What are Sambonoza's financing needs for the coming year?

Reference no: EM13814047

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