What amount of additional funds will super fun toys need


Suppose Super Fun toys has sales of $8.9 million for the year just ended, the profit margin of the firm is 16 percent with a retention rate of 28 percent, and the firm expects sales of $10.8 million next year.

If fixed assets will have to grow by $800,000 to support the sales growth, with current assets and current liabilities expected to grow with sales, what amount of additional funds will super fun toys need from external sources to fund the expect growth?

Assets                                                                                                   Liabilities and Equity

Current assets             $3,500,000                                       Current liabilities              $2,400,000

Fixed assets                $5,100,000                                        Long term debt               $2,100,000

                                                                                        Equity                           $4,500,000

Total assets                 $8,600,000                                        Total liabilities & equity     $8,600,000

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Financial Management: What amount of additional funds will super fun toys need
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