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Fund the expected growth

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After adding a new line of widgets, Worldwide Widget Manufacturing, Inc., expects all assets and current liabilities to shrink with sales. The company has sales for the year just ended of $20 million. The company also has a profit margin of 20 percent, a return ratio of 25 percent, and expected sales of $18 million next year. Worldwide Widget Manufacturing, Inc., shows the following on its balance sheet. 

Assets Liabilities and Equity

Current assets $2,500,000 Current liabilities $1,250,000

Fixed assets $3,500,000 Long-term debt $1,500,000

Equity $3,250,000

Total assets $6,000,000 Total liabilities and equity $6,000,000

What amount of additional funds (AFN) will Worldwide Widget Manufacturing, Inc., need from external sources to fund the expected growth? What does the AFN show?

Reference no: EM132370342

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