What amount of additional funds will wall-e need

Reference no: EM131793379

Question: Suppose that Wall-E Corp. currently has the balance sheet shown below, and that sales for the year just ended were $7.6 million. The firm also has a profit margin of 25 percent, a retention ratio of 30 percent, and expects sales of $9.6 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	$	2,508,000	Current liabilities	$	2,280,000
Fixed assets		5,700,000	Long-term debt		1,800,000
			Equity		4,128,000
Total assets	$	8,208,000	Total liabilities and equity	$	8,208,000

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?

Reference no: EM131793379

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