Kingpie projects its sales net year to be 4 million and, Ask an Expert

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KingPie projects its sales net year to be $4 million and expects to earn 5 percent of that amount after taxes. the firm is currently in the process of projecting its financing needs and has made the following assumptions (projections):

1. Current assets are equal to 20% of sales and fixes assets remain at their current level of 1 million
2. Common equity is currently $0.8 million, and the firm pays out half of its after-tax earning in dividends.
3. the firm has short-term payable and trade credit that normally equal 10% of sales, and its has no long-term debt outstanding.

What are KingPies financing needs for the coming year?

TIP: complete the balance sheet using the percentage of sales assumptions to solve.

What is the dicretionary funding need?

What is the total financing needed to operate next year (sum)?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9864153

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