The Manning Company has financial statements as shown next, which are representative of the company's historical average. The s expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external fund The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Sales Expenses Earnings before interest and taxes Interest. Earnings before taxes Taxes Income Statement. Earnings after taxes. Dividends Current assets. Cash Accounts receivable. Inventory Fixed assets Assets $ 250,000 184,800 $ 65,200 8,600 $ 56,600 16,600 $ 40,000 $ 16,000 Balance Sheet (in $ millions) $ 125,000 96,000 Liabilities and Stockholders' Equity $ 4,000 Accounts payable Accrued wages 53,000 68,000 Accrued taxes Current liabilities Notes payable Long-term debt Common stock Retained earnings $ 23,500 2,000 4,500 $ 30,000 8,600 23,000 120,000 39,400
The Manning Company has financial statements as shown next, which are representative of the company's historical average. The s expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external fund The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Sales Expenses Earnings before interest and taxes Interest. Earnings before taxes Taxes Income Statement. Earnings after taxes. Dividends Current assets. Cash Accounts receivable. Inventory Fixed assets Assets $ 250,000 184,800 $ 65,200 8,600 $ 56,600 16,600 $ 40,000 $ 16,000 Balance Sheet (in $ millions) $ 125,000 96,000 Liabilities and Stockholders' Equity $ 4,000 Accounts payable Accrued wages 53,000 68,000 Accrued taxes Current liabilities Notes payable Long-term debt Common stock Retained earnings $ 23,500 2,000 4,500 $ 30,000 8,600 23,000 120,000 39,400
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
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A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm
is expecting a 30 percent increase in sales next year, and management is concerned about the company's need for external funds.
The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset
utilization in the existing store. Among liabilities, only current liabilities vary directly with sales.
Sales
Expenses
Earnings before interest and taxes
Interest
Earnings before taxes
Taxes
Earnings after taxes
Dividends
Current assets
Income Statement
Cash
Accounts receivable
Inventory
Fixed assets
Total assets
Assets
The firm
$ 250,000
184,800
$ 65,200
8,600
$ 56,600
16,600
$ 40,000
$ 16,000
Balance Sheet (in $ millions)
$ 221,000
Liabilities and Stockholders' Equity
$ 4,000 Accounts payable
Accrued wages
53,000
68,000
Accrued taxes
$ 125,000
96,000
Current liabilities
Notes payable
Long-term debt
Common stock
Retained earnings
Total liabilities and stockholders' equity
$ 23,500
2,000
4,500
$ 30,000
8,600
23,000
120,000
39,400
$ 221,000
Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit
margin and payout ratio must be found from the income statement.)
Note: Do not round intermediate calculations. Input your answer as positive a value.
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