Please see attached. Please work the formula in steps.Last year's sales = So $400,000 Last year's accounts payable $40,000
Sales growth rate = g 30% Last year's notes payable $20,000
Last year's total assests = Ao $140,000 Last year's accruals $30,000
Last year's profit margin = M 15.0% Target payout ratio 30.0%
a. Based on the AFN equation, what is the AFN for the coming year?
b. Interpret the answer
c. If notes payable increase what is expected to happen to AFN?
Last year's sales = So $400,000 Last year's accounts payable $40,000
Sales growth rate = g 30% Last year's notes payable $20,000
Last year's total assests = Ao $140,000 Last year's accruals $30,000
Last year's profit margin = M 15.0% Target payout ratio 30.0%
a. Based on the AFN equation, what is the AFN for the coming year?
AFN = Increase in assets - increase in spontaneous liabilities - increase in retained earnings
The increase in assets requires investment. A part is met ...
Solution Summary
The solution explains how to calculate the amount of additional funds needed.
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