A. BHS Inc. determines that sales will rise from $510,000 to $680,000 next year. Current assets are 60% of sales and current liabilities are 40% of sales. BHS is not operating at capacity. BHS has an 11.5 % profit margin and a 40% dividend payout ratio. What is the level of required new funds?
B. What is the required level of new funds for BHS if their dividend payout ratio increases to 70% and their profit percentage drops to 9.7% assuming the remaining facts from part A are the same?