The net income is RO 20 million. Last year's sales were RO 180 million. The total assets represent two-thirds of the total sales. The accounts payables represent 20% of total assets. The accruals are RO 1 million and the notes payable is RO 2 million. The assets and costs vary directly with sales. The retained earnings are RO 8 million. The firm operates at full capacity. If the sales growth rate is 10%, how much external financing is needed (EFN)?
The net income is RO 20 million. Last year's sales were RO 180 million. The total assets represent two-thirds of the total sales. The accounts payables represent 20% of total assets. The accruals are RO 1 million and the notes payable is RO 2 million. The assets and costs vary directly with sales. The retained earnings are RO 8 million. The firm operates at full capacity. If the sales growth rate is 10%, how much external financing is needed (EFN)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The net income is RO 20 million. Last year's sales were RO 180 million. The total assets represent two-thirds of the total sales. The accounts payables represent 20% of total assets. The accruals are RO 1 million and the notes payable is RO 2 million. The assets and costs vary directly with sales. The
Please use THIS formula (in the picture):
Transcribed Image Text:Assets
Spon Liab
XASales
xASaks -(PMx Projected Saks) x(l-d)
Sales
Sales
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