Explore BrainMass

Explore BrainMass

    External Financing: Percentage Sales Method

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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.

    © BrainMass Inc. brainmass.com December 15, 2022, 8:03 pm ad1c9bdddf

    Solution Preview

    External financing requirement = [(total assets/sales) x change in sales] - ...

    Solution Summary

    Percentage Sales Method is expressed in the solution.