Problem: Please work the formula in steps.
Last year's sales = So $400,000 Last year's accounts payable $40,000
Sales growth rate = g 30% Last year's notes payable $20,000
Last year's total assests = Ao $140,000 Last year's accruals $30,000
Last year's profit margin = M 15.0% Target payout ratio 30.0%
Q1. Based on the AFN equation, what is the AFN for the coming year?
Q2. Interpret the answer
Q3. If notes payable increase what is expected to happen to AFN?