Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the year just ended were $10.8 million. The firm also has a profit margin of 30 percent and a retention ratio of 20 percent, and expects sales of $8.8 million next year. Assets Liabilities and Equity Current assets Fixed assets $ 2,544,000 4,800,000 Current liabilities $ 2,423,520 Long-term debt 1,900,000 3,020,480 Total assets $ 7,344,000 Equity Total liabilities and equity $ 7,344,000 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? Note: Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign. Additional funds needed
Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the year just ended were $10.8 million. The firm also has a profit margin of 30 percent and a retention ratio of 20 percent, and expects sales of $8.8 million next year. Assets Liabilities and Equity Current assets Fixed assets $ 2,544,000 4,800,000 Current liabilities $ 2,423,520 Long-term debt 1,900,000 3,020,480 Total assets $ 7,344,000 Equity Total liabilities and equity $ 7,344,000 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? Note: Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign. Additional funds needed
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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Transcribed Image Text:Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that
sales for the year just ended were $10.8 million. The firm also has a profit margin of 30
percent and a retention ratio of 20 percent, and expects sales of $8.8 million next year.
Assets
Liabilities and Equity
Current assets
Fixed assets
$ 2,544,000
4,800,000
Current liabilities
$ 2,423,520
Long-term debt
1,900,000
3,020,480
Total assets
$ 7,344,000
Equity
Total liabilities and equity $ 7,344,000
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?
Note: Enter your answer in dollars not in millions. Negative amount should be indicated
by a minus sign.
Additional funds needed
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