A company's sales in 2020 were $3.8 million and its total spontaneous se the firm's spontaneous liabilities consisted of $8.3 milllion in wages payable, $8.8 million in accounts payable, and $5.1 million in accrued expenses. The firm's profit margin is 9.7% and Its dividend payout ratio is 9.1%. The balance sheet at year-end is similar in percentage of sales to that of previous years and this will continue in the future. Required: What is the percentage increase in sales that the company must achieve in order to avoid raising funds externally?
A company's sales in 2020 were $3.8 million and its total spontaneous se the firm's spontaneous liabilities consisted of $8.3 milllion in wages payable, $8.8 million in accounts payable, and $5.1 million in accrued expenses. The firm's profit margin is 9.7% and Its dividend payout ratio is 9.1%. The balance sheet at year-end is similar in percentage of sales to that of previous years and this will continue in the future. Required: What is the percentage increase in sales that the company must achieve in order to avoid raising funds externally?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter7: Analysis Of Financial Statements
Section: Chapter Questions
Problem 12P: The Kretovich Company had a quick ratio of 1.4, a current ratio of 3.0, a days’ sales outstanding of...
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