External Financing: Percentage Sales Method
Given the compressed version of balance sheet and income statement, estimate the amount of external financing needed to increase sales by 20% next year (use percentage of sales method).
(Dividend payout is 50%)
Balance Sheet (End of the Year)
Assets $2,000 Debt $1000
Equity $1000
Total $2000 $2000
Income Statement
Sales $1000
Costs 800
Net Income 200.
https://brainmass.com/economics/finance/external-financing-percentage-sales-method-268981
Solution Preview
External financing requirement = [(total assets/sales) x change in sales] - ...
Solution Summary
Percentage Sales Method is expressed in the solution.
$2.19