Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the yearjust ended were $10 million. The firm also has a profit margin of 25 percent, a retention ratio of 30percent, and expects sales of $8 million next year.AssetsCurrent assetsFixed assetsTotal assetsLiabilities and EquityAdditional funds neededCurrent liabilities$2,000,0004,000,000 Long-term debtEquity$6,000,000 Total liabilities and equity$1,500,0001,500,0003,000,000$6,000,000If all assets and current liabilities are expected to shrink with sales, what amount of additional funds willGyp Sum need from external sources to fund the expected growth? (Enter your answer in dollars not inmillions. Negative amount should be indicated by a minus sign.)

Additional funds refer to the amount that is required to be generated by the company to finance its…

Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the year just ended were $10 million. The firm also has a profit margin of 25 percent, a retention ratio of 30 percent, and expects sales of $8 million next year. Assets Current assets Fixed assets Total assets Liabilities and Equity Additional funds needed $2,000,000 Current liabilities 4,000,000 Long-term debt Equity $6,000,000 Total liabilities and equity $1,500,000 1,500,000 3,000,000 $6,000,000 If all assets and current liabilities are expected to shrink with sales, what amount of additional funds will Gyp Sum need from external sources to fund the expected growth? (Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign.)

Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the year just ended were $10 million. The firm also has a profit margin of 25 percent, a retention ratio of 30 percent, and expects sales of $8 million next year. Assets Current assets Fixed assets Total assets Liabilities and Equity Additional funds needed $2,000,000 Current liabilities 4,000,000 Long-term debt Equity $6,000,000 Total liabilities and equity $1,500,000 1,500,000 3,000,000 $6,000,000 If all assets and current liabilities are expected to shrink with sales, what amount of additional funds will Gyp Sum need from external sources to fund the expected growth? (Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign.)

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

Section: Chapter Questions

Problem 1PS

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