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Sources to fund the expected growth

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Reference no: EM132117931

Wall-E Corp. currently has the balance sheet shown below, and that sales for the year just ended were $7.8 million. The firm also has a profit margin of 30 percent, a retention ratio of 20 percent, and expects sales of $9.8 million next year. Fixed assets are currently fully utilized, and the nature of Wall-E's fixed assets is such that they must be added in $1 million increments.

Assets Liabilities and Equity  

Current assets $2,730,000  Current liabilities $2,184,000   

Fixed assets 5,070,000  Long-term debt 1,900,000     

Equity 3,716,000       

Total assets= $7,800,000  Total liabilities and equity= $7,800,000

If current assets and current liabilities are expected to grow with sales, what amount of additional funds will Wall-E need from external sources to fund the expected growth? (Enter your answer in dollars not in millions.)

Reference no: EM132117931

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