A company's sales in 2020 were $3.8 million and its total spontaneous se the firm's spontaneous liabilities consisted of $8.3 milllion in wages payable, $8.8 million in accounts payable, and $5.1 million in accrued expenses. The firm's profit margin is 9.7% and Its dividend payout ratio is 9.1%. The balance sheet at year-end is similar in percentage of sales to that of previous years and this will continue in the future. Required: What is the percentage increase in sales that the company must achieve in order to avoid raising funds externally?
A company's sales in 2020 were $3.8 million and its total spontaneous se the firm's spontaneous liabilities consisted of $8.3 milllion in wages payable, $8.8 million in accounts payable, and $5.1 million in accrued expenses. The firm's profit margin is 9.7% and Its dividend payout ratio is 9.1%. The balance sheet at year-end is similar in percentage of sales to that of previous years and this will continue in the future. Required: What is the percentage increase in sales that the company must achieve in order to avoid raising funds externally?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![A company's sales in 2020 were $3.8 million and its total spontaneous assets were $8.7 million. Also in the same year,
the firm's spontaneous liabilities consisted of $8.3 million in wages payable, $8.8 million in accounts payable, and $5.1
million in accrued expenses. The firm's profit margin is 9.7% and its dividend payout ratio is 9.1%. The balance sheet at
year-end is similar in percentage of sales to that of prevlous years and this will continue in the future.
Required: What is the percentage increase in sales that the company must achieve in order to avoid raising funds
externally?
Note: The term "k" is used to represent thousands (x $1,000).
% (ROUND YOUR ANSWER TO 2 DECIMAL PLACES. FOR EXAMPLE: 17.23)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdf19cb8c-dbb0-4e57-9c44-fb52eb71ff68%2F8cb861bc-db39-47ec-a0af-874391d18908%2F3a71n1i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A company's sales in 2020 were $3.8 million and its total spontaneous assets were $8.7 million. Also in the same year,
the firm's spontaneous liabilities consisted of $8.3 million in wages payable, $8.8 million in accounts payable, and $5.1
million in accrued expenses. The firm's profit margin is 9.7% and its dividend payout ratio is 9.1%. The balance sheet at
year-end is similar in percentage of sales to that of prevlous years and this will continue in the future.
Required: What is the percentage increase in sales that the company must achieve in order to avoid raising funds
externally?
Note: The term "k" is used to represent thousands (x $1,000).
% (ROUND YOUR ANSWER TO 2 DECIMAL PLACES. FOR EXAMPLE: 17.23)
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education