What is the amount of discretionary financing needed

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Problem - A corporation established projected sales at $210 million. It is using its current year balance sheet as a basis for creating a pro forma balance sheet. They estimate cash will be 7% of projected sales, accounts receivable will be 19% of projected sales, and the PP&E will be 55% of the projected sales. Accounts payable are estimated to be 12% of projected sales. Owner's equity is $34 million. Long term debt is $90 million. Additionally, the firm raised $12.9 million of equity capital.

Required - What is the amount of discretionary financing needed? What is the mathematical equation used to get the answer?

Reference no: EM132467648

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