Week 3 Finance Assignment - therefore the need for external...

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a. Increase in Sales = 100 million x 15% = 15 million Increase in Asset (being based on sales) = 5% + 15% + 25% + 40% = 85% Increase in Liabilities (being Based On Sales) = 15% + 10% = 25% Increase in Asset – Increase in Liabilities – Change in Retained Earnings after Dividend = Need for External Financing so… 15 x 85% - 15 x 25% - 115 x 6% x (1.50) = 5.55 Million b. If Landis Corporation reduced their payout ratio then there would be more earnings retained
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Unformatted text preview: therefore the need for external financing would be not be as important and as necessary. If Landis Corporations growth rate slows then the need for Total Additional Assets would lessen, therefore reducing the need for external financing. (asset liabilities) If Landis Corporation goes through a decline in its profit margin then the retained earning woulb be reduced, therefore increasing the need for external financing. c....
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This note was uploaded on 10/21/2010 for the course FIN 200 AAAA0RWSC4 taught by Professor Mchenry during the Spring '10 term at University of Phoenix.

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Week 3 Finance Assignment - therefore the need for external...

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