The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firmis expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds.The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient assetutilization in the existing store. Among liabilities, only current liabilities vary directly with sales.SalesExpensesEarnings before interest and taxesInterestEarnings before taxesTaxesEarnings after taxesDividendsCashAccounts receivableInventoryCurrent assetsFixed assetsIncome StatementTotal assetsAssets$ 280,000222,800$ 57,2007,800$ 49,40015,800$ 33,600$ 6,720Balance Sheet (in $ millions)Liabilities and Stockholders' Equity$ 5,000 Accounts payableAccrued wages86,00077,000Accrued taxes$ 168,00088,000Current liabilitiesNotes payableLong-term debtCommon stockRetained earnings$ 256,000 Total liabilities and stockholders' equity$ 22,1001,6004,300$ 28,0007,80019,000128,00073,200$ 256,000Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profitmargin and payout ratio must be found from the income statement.)Note: Do not round intermediate calculations. Input your answer as positive a value.

External Financing Needed: It refers to the additional funds required by the company or…

Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit margin and payout ratio must be found from the income statement.) Note: Do not round intermediate calculations. Input your answer as positive a value.

Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit margin and payout ratio must be found from the income statement.) Note: Do not round intermediate calculations. Input your answer as positive a value.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 2STP

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The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Sales Expenses Earnings before interest and taxes Interest Earnings before taxes Taxes Earnings after taxes Dividends Current assets Income Statement Cash Accounts receivable Inventory Fixed assets Total assets Assets The firm $ 250,000 184,800 $ 65,200 8,600 $ 56,600 16,600 $ 40,000 $ 16,000 Balance Sheet (in $ millions) $ 221,000 Liabilities and Stockholders' Equity $ 4,000 Accounts payable Accrued wages 53,000 68,000 Accrued taxes $ 125,000 96,000 Current liabilities Notes payable Long-term debt…
The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Income Statement Sales $220,000 158,000 $ 62,000 9,400 $ 52,600 17,400 $ 35,200 Expenses Earnings before interest and taxes Interest Earnings before taxes Тахes Earnings after taxes Dividends $ 8,800 Balance Sheet Assets Liabilities and Stockholders' Equity $ 5,000 61,000 Accrued wages 77,000 Accrued taxes Cash $ Accounts payable $ 25,700 Accounts receivable 2,400 4,900 $ 33,000 9,400 Inventory $143,000 89,000 Notes payable Current assets Current liabilities Fixed assets Long-term debt Common stock…
The Manning Company has financial statements as shown next, which are representative of the company’s historical average. The firm is expecting a 30 percent increase in sales next year, and management is concerned about the company’s need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Income Statement Sales $ 200,000 Expenses 149,600 Earnings before interest and taxes $ 50,400 Interest 9,200 Earnings before taxes $ 41,200 Taxes 17,200 Earnings after taxes $ 24,000 Dividends $ 6,000 Balance Sheet Assets Liabilities and Stockholders' Equity Cash $ 6,000 Accounts payable $ 22,900 Accounts receivable 55,000 Accrued wages 2,300 Inventory 69,000 Accrued taxes 4,800 Current assets $ 130,000 Current liabilities $ 30,000 Fixed…
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