ff2 Conn Man's Shops, a national clothing chain, had sales of $390 million last year. The business has a steady net profit margin of 8percent and a dividend payout ratio of 35 percent. The balance sheet for the end of last year is shown.CashAccounts receivableInventoryPlant and equipmentTotal assetsAssetsBalance Sheet End of Year (in $ millions)Required new funds$ 39 Accounts payableAccrued expensesOther payablesCommon stockRetained earningsTotal liabilities and stockholders' equity3480$ 198$351$Liabilities and Stockholders' EquityThe firm's marketing staff has told the president that in the coming year there will be a large increase in the demand for overcoats andwool slacks. A sales increase of 10 percent is forecast for the company.All balance sheet items are expected to maintain the same percent-of-sales relationships as last year,* except for common stock andretained earnings. No change is scheduled in the number of common stock shares outstanding, and retained earnings will change asdictated 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.a. Will external financing be required for the company during the coming year?NoYes$ 51376878117$ 351b. What would be the need for external financing if the net profit margin went up to 9.50 percent and the dividend payout ratio wasincreased to 60 percent?Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer indollars, not millions, (e.g., $1,234,567). Input your answer as positive a value.0

a. Current sales = $390 millionProfit margin = 8%Dividend payout = 35% Growth rate = 10% Spontaneous…

Conn Man's Shops, a national clothing chain, had sales of $390 million last year. The business has a steady net profit margin percent and a dividend payout ratio of 35 percent. The balance sheet for the end of last year is shown. Assets Cash Accounts receivable Inventory Plant and equipment Total assets Balance Sheet End of Year (in $ millions) Liabilities and Stockholders' Equity $39 Accounts payable Accrued expenses Other payables Common stock Retained earnings Total liabilities and stockholders' equity 34 80 $ 198 $351 $ 51 37 68 78 117 $ 351 The firm's marketing staff has told the president that in the coming year there will be a large increase in the demand for over wool slacks. A sales increase of 10 percent is forecast for the company.

Conn Man's Shops, a national clothing chain, had sales of $390 million last year. The business has a steady net profit margin percent and a dividend payout ratio of 35 percent. The balance sheet for the end of last year is shown. Assets Cash Accounts receivable Inventory Plant and equipment Total assets Balance Sheet End of Year (in $ millions) Liabilities and Stockholders' Equity $39 Accounts payable Accrued expenses Other payables Common stock Retained earnings Total liabilities and stockholders' equity 34 80 $ 198 $351 $ 51 37 68 78 117 $ 351 The firm's marketing staff has told the president that in the coming year there will be a large increase in the demand for over wool slacks. A sales increase of 10 percent is forecast for the company.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter21: The Statement Of Cash Flows

Section: Chapter Questions

Problem 5MC

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Question

ff2

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 balance sheet for the end of last year is shown.
Cash
Accounts receivable
Inventory
Plant and equipment
Total assets
Assets
Balance Sheet End of Year (in $ millions)
Required new funds
$ 39 Accounts payable
Accrued expenses
Other payables
Common stock
Retained earnings
Total liabilities and stockholders' equity
34
80
$ 198
$351
$
Liabilities and Stockholders' Equity
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 10 percent is forecast for the company.
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.
a. Will external financing be required for the company during the coming year?
No
Yes
$ 51
37
68
78
117
$ 351
b. What would be the need for external financing if the net profit margin went up to 9.50 percent and the dividend payout ratio was
increased to 60 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.
0

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