Question: Can you help me use the AFN equation to forecast the additional funds needed for the coming year? Sales expected to increase by 15% from

Can you help me use the AFN equation to forecast the additional funds needed for the coming year?

  • Sales expected to increase by 15% from $8.6 million in 2016 to $9.89 million in 2017.
  • assets totaled $5 million at the end of 2016.
  • they are already at full capacity, so its assets must grow at the same rate as projected sales.
  • at the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals.
  • the after tax profit margin is forecasted to be 5%,
  • the forecasted payout ratio is 55%.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!