Appalachian Registers, Inc (ARI) has current sales of $50 million Sales are expected to grow to $75 million next year ARI currently has accounts receivable of $10 million, inventories of $15 million, and net fixed assets of $20 million These assets are expected to grow at the same rate as sales ove...

Sales growth 50 percent Cash growth 2 Accounts receivable growth 5 Inventory growth 75 ...

Appalachian Registers, Inc. (ARI) has current sales of $50 million. Sales are expected to grow to $75

Question:

Appalachian Registers, Inc. (ARI) has current sales of $50 million. Sales are expected to grow to $75 million next year. ARI currently has of $10 million, inventories of $15 million, and net fixed assets of $20 million. These assets are expected to grow at the same rate as sales over the next year. are expected to increase from their current level of $10 million to a new level of $13 million next year. ARI wants to increase its cash balance at the end of next year by $2 million over its current cash balances, which average $4 million. Earnings after taxes next year are forecasted to be $10 million. Next year, ARI plans to pay dividends of $1 million, up from $500,000 this year. ARI’s marginal tax rate is 34 percent.
How much external financing is required by ARI next year?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...