Will the company require any external cash flows next year

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Question - Cash Flow Calculation - Fauquier Resources Inc's current revenue is $20 million, and the sales and marketing department expects that it will reach $30 million by next year. Currently, trade receivables are $3.5 million, inventories $4.5 million and non-current assets, $6million. The company expects these assets to increase at the same percentage rate as that of revenue.

Based on his calculation, the treasurer anticipates a $2.5 million increase in the companies cash balance and that trade and other payable will increase from $5 million to $7 million. According to the company operational plans, the pre-tax profit for the year is expected to reach $4 million, and the board of directors has approved a $1.5 million dividend payout. The company income tax rate is 40 %.

Will the company require any external cash flows next year? If yes, how much?

Reference no: EM132815979

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