Owen’s Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity.   Balance Sheet (in $ millions) Assets Liabilities and Stockholders' Equity Cash $ 11 Accounts payable $ 23 Accounts receivable   28 Accrued wages   10 Inventory   29 Accrued taxes   13 Current assets $ 68 Current liabilities $ 46 Fixed assets   46 Notes payable   18       Common stock   20       Retained earnings   30 Total assets $ 114 Total liabilities and stockholders' equity $ 114     Owen’s Electronics has an aftertax profit margin of 10 percent and a dividend payout ratio of 50 percent.   If sales grow by 30 percent next year, determine how many dollars of new funds are needed to finance the growth. (Do not round intermediate calculations. Enter your answer in dollars, not millions, (e.g., $1,234,567).)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Owen’s Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity.

 

Balance Sheet
(in $ millions)
Assets Liabilities and Stockholders' Equity
Cash $ 11 Accounts payable $ 23
Accounts receivable   28 Accrued wages   10
Inventory   29 Accrued taxes   13
Current assets $ 68 Current liabilities $ 46
Fixed assets   46 Notes payable   18
      Common stock   20
      Retained earnings   30
Total assets $ 114 Total liabilities and stockholders' equity $ 114
 

 

Owen’s Electronics has an aftertax profit margin of 10 percent and a dividend payout ratio of 50 percent.

 

If sales grow by 30 percent next year, determine how many dollars of new funds are needed to finance the growth. (Do not round intermediate calculations. Enter your answer in dollars, not millions, (e.g., $1,234,567).)

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