Additional Funds Needed with Excess Capacity
Baxter Box Companyâs balance sheet showed the following amounts as of
Cash 10.00 Accounts Payable
Accounts Receivable 40.00 Accruals
Inventory 50.00 Notes Payable
Net Fixed Assets 100.00 Long-term debt 20.00
Â Common Stock 20.00
Â Retained Earning 120.00
Total Assets 200.00 Total Liabilities and Equity 200.00
Last year the firmâs sale were $2,000, and its had a profit margin of
10 percent and a dividend payout ratio of 50 percent. Baxter Box
operated its fixed assets at 80 percent of capacity during the year. The
company expected to increase next yearâs sales by 37.5 percent to
$2,750, but the profit margin is expected to fall to 3 percent, and the
dividend payout ratio is expected to rise to 60 percent. What is Baxter
Box additional funds needed (AFN) for next year?
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