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What are the company financing needs

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a) Distribution Limited projects sales next year to be $6 million and expects to earn 5% of that amount after taxes. The company is currently in the process of projecting its financial needs and has made the following assumptions (projections):

  • Current Assets will equal 10% of sales, and fixed assets will remain at their current level of $1.2million.
  • Common equity is currently $0.7million (made up entirely of Retained earnings), and the company pays out half of its after-tax earnings in dividends.
  • The company has short-term payables that normally equal 8% of sales each and it has no long-term debt outstanding.

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

Reference no: EM132595079

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