Reference no: EM132495440
Suppose that Wind Em Corp. currently has the balance sheet shown below, and that sales for the year just ended were $7.5 million. The firm also has a profit margin of 30 percent, a retention ratio of 20 percent, and expects sales of $8.5 million next year.
Assets Liabilities and Equity
Current assets $2,375,000 Current liabilities $3,150,000
Fixed assets 5,500,000 Long-term debt 1,750,000
Equity 2,975,000
Total assets $7,875,000 Total liabilities and equity $7,875,000
Question 1: If all assets and current liabilities are expected to grow with sales, what amount of additional funds will Wind Em need from external sources to fund the expected growth?
Question 2: Additional Funds needed in dollars?