What is the amount of external financing needed

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PT XYZ has the following financial information for 2016. Sales = $2M. Net Income is $0.4M, and $0.1M is paid to shareholder as dividend. Current Assets and Fixed Assets are $0.4M and $3.6M, respectively. Current Liabilities = $0.2M, Long-term Debts = $1M, Common Stock = $2M and Accumulated Retained Earning = $0.8M.

Question a. If 2017 sales is projected to be $2.4M, what is the amount of external financing needed (EFN), assuming XYZ is operating at full capacity, and profit margin and payout ratio remain constant.

Question b. From the previous question, what is the EFN if XYZ is operating at 80% of capacity.

Reference no: EM132504969

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