Broussard Skateboard's sales are expected to increase by 20% from $7.2 million in 2019 to $8.64 million in 2020. Its assets totaled $3 million at the end of 2019. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 45%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.
Broussard Skateboard's sales are expected to increase by 20% from $7.2 million in 2019 to $8.64 million in 2020. Its assets totaled $3 million at the end of 2019. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 45%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Broussard Skateboard's sales are expected to increase by
20% from $7.2 million in 2019 to $8.64 million in 2020. Its
assets totaled $3 million at the end of 2019.
Broussard is already at full capacity, so its assets must
grow at the same rate as projected sales. At the end of
2019, current liabilities were $1.4 million, consisting of
$450,000 of accounts payable, $500,000 of notes
payable, and $450,000 of accruals. The after-tax profit
margin is forecasted to be 6%, and the forecasted payout
ratio is 45%. Use the AFN equation to forecast
Broussard's additional funds needed for the coming year.
Enter your answer in dollars. For example, an answer of
$1.2 million should be entered as $1,200,000. Do not
round intermediate calculations. Round your answer to
the nearest dollar.
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