Owen’s Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity.
Balance Sheet (in $ millions)
Assets Liabilities and Stockholders' Equity
Cash $ 3 Accounts payable $ 16
Accounts receivable $ 21 Accrued wages 3
Inventory 24 Accrued taxes 9
Current assets $ 48 Current liabilities $ 28
Fixed assets 41 Notes payable 11
Common stock 16
Retained earnings 34
Total assets $ 89 Total liabilities and stockholders' equity $ 89
Owen’s has an aftertax profit margin of 6 percent and a dividend payout ratio of 20 percent. If sales grow by 15 percent next year, determine how many dollars of new funds are needed to finance the growth. (Do not round intermediate calculations. Enter your answer in dollars, not millions, (e.g., $1,234,567).) New funds:____________________