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After adding a new line of widgets, Worldwide expects all assets and current liabilities to shrink with sales. the company has sales for the year just ended of $20 million. The company also has a profit margin of 20 percent, a return ratio of 25 percent, and expected sales of $18 million next year.

Assets                                                                              Liabilities and Equity

Current assets $2,500,000                                                                      Current Liabilites      $1,250,000

Fixed Assets     $3,500,00                                                                         Long term debt        $1,500,000                                                                                                       

                                                                                                                   Equity                      $3,250,000

Total Assets               $6,000,000                                                              Total liabilities and equity     $6,000,000

Worldwide Widgets shows the following on its balance sheet. What amount of additional funds (AFN) will worldwide need from external sources to fund the expected growth? What does the AFN show?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92270625

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