The Booth Company's sales are forecasted to double from $1,000 in 2019 to $2,000 in 2020. Here is the December 31, 2019, balance sheet: Cash Accounts receivable Inventories $ 100 Accounts payable $ 50 200 Notes payable 150 200 Accruals 50 Net fixed assets 500 Long-term debt 400 Common stock 100 Total assets $1,000 Retained earnings Total liabilities and equity 250 $1,000 Booth's fixed assets were used to only 50% of capacity during 2019, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 3% and its payout ratio to be 40%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar.
The Booth Company's sales are forecasted to double from $1,000 in 2019 to $2,000 in 2020. Here is the December 31, 2019, balance sheet: Cash Accounts receivable Inventories $ 100 Accounts payable $ 50 200 Notes payable 150 200 Accruals 50 Net fixed assets 500 Long-term debt 400 Common stock 100 Total assets $1,000 Retained earnings Total liabilities and equity 250 $1,000 Booth's fixed assets were used to only 50% of capacity during 2019, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist. Booth's after-tax profit margin is forecasted to be 3% and its payout ratio to be 40%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The Booth Company's sales are forecasted to double from $1,000 in 2019 to $2,000 in 2020. Here is the December 31, 2019, balance sheet:
Cash
Accounts receivable
Inventories
$ 100
Accounts payable
$ 50
200
Notes payable
150
200
Accruals
50
Net fixed assets
500
Long-term debt
400
Common stock
100
Total assets
$1,000
Retained earnings
Total liabilities and equity
250
$1,000
Booth's fixed assets were used to only 50% of capacity during 2019, but its current assets were at their proper levels in relation to sales. All assets except fixed assets must increase at the same rate as sales, and fixed assets would also have to increase at the same rate if the current excess capacity did not exist.
Booth's after-tax profit margin is forecasted to be 3% and its payout ratio to be 40%. What is Booth's additional funds needed (AFN) for the coming year? Round your answer to the nearest dollar.
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