a. Will external financing be required for the company during the coming year? Yes O No b. What would be the need for external financing if the net profit margin went up to 9.00 percent and the dividend payout ratio was increased to 50 percent? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer in dollars, not millions, (e.g., $1,234,567). Input your answer as positive a value. Required new funds Cash Accounts receivable Inventory Assets Plant and equipment Total assets Balance Sheet End of Year (in $ millions) Liabilities and Stockholders' Equity $ 29 Accounts payable $ 65 44 Accrued expenses 39 86 Other payables 52 $ 153 Common stock 58 Retained earnings 98 $ 312 Total liabilities and stockholders' equity $ 312
Conn Man’s Shops, a national clothing chain, had sales of $390 million last year. The business has a steady net profit margin of 8 percent and a dividend payout ratio of 35 percent. The
The firm's marketing staff has told the president that in the coming year there will be a large increase in the demand for overcoats and wool slacks. A sales increase of 20 percent is
All balance sheet items are expected to maintain the same percent-of-sales relationships as last year,* except for common stock and retained earnings. No change is scheduled in the number of common stock shares outstanding, and retained earnings will change as dictated by the profits and dividend policy of the firm. (Remember, the net profit margin is 8 percent.)
*This includes fixed assets, since the firm is at full capacity.
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