You have a business that just ended its fourth year. The fourth-year income statement and ending balance sheet are as follows:

Revenue $1,000,000
COGS 500,000
Gross profit 500,000
Other variable expenses 100,000
Depreciation 25,000
Other fixed expenses 300,000
Net profit 75,000

Cash 50,000 A/P 25,000
A/R 100,000 Other short-term debt 100,000
Inventory 125,000 Long term debt 75,000
Capital assets 125,000 Equity 200,000

You believe that revenues will grow by 20% next year. How much additional funding will you need to support this revenue growth, regardless of source?

Answer rating: 100% (QA)

200000 Explanation Assuming that costs and expenses will ... View the full answer