Axle Supply Co. expects sales next year to be $300,000. Inventory and accounts receivable will increase by

Question:

Axle Supply Co. expects sales next year to be $300,000. Inventory and accounts receivable will increase by $60,000 to accommodate this sales level.

The company has a steady profit margin of 10 percent with a 30 percent dividend payout. How much external financing will the firm have to seek?

Assume there is no increase in liabilities other than that which will occur with the external financing.

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... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...