Chapter 4 Saved Help Seve & Exit Submit Harvard Prep Shops, a national clothing chain, had sales of $300 million last year. The business has a steady net profit margin of 25 percent and a dividend payout ratio of 40 percent. The balance sheet for the end of last year is shown below. Assets Cash Account receivable Inventory Balance Sheet December 31, zaxx ($ millions) Liabilities and Shareholders' Equity $7 Accounts payable 28 Accrued expenses 65 Other payables Common stock Retained earnings $30 12 18 100 Plant and equipment 140 Book Total assets Total liabilities and equity Per Harvard's anticipates a large increase in the demand for tweed sport coats and deck shoes. A sales increase of 25 percent is forecast. All balance sheet items are expected to maintain the same percent of sales relationships as last year, except for common stock and retained earnings. No change in the number of common shares outstanding is scheduled and retained earnings will change as dictated by the profits and dividend policy of the firm a. Will external financing be required for the Prep Shop during the coming year? Yes ** D d BE O ENG 3 157 PM 20-06 pe here to search Chapter 4 Saved Help Seve & Exit Submit Harvard Prep Shops, a national clothing chain, had sales of $300 million last year. The business has a steady net profit margin of 25 percent and a dividend payout ratio of 40 percent. The balance sheet for the end of last year is shown below. Assets Cash Account receivable Inventory Balance Sheet December 31, zaxx ($ millions) Liabilities and Shareholders' Equity $7 Accounts payable 28 Accrued expenses 65 Other payables Common stock Retained earnings $30 12 18 100 Plant and equipment 140 Book Total assets Total liabilities and equity Per Harvard's anticipates a large increase in the demand for tweed sport coats and deck shoes. A sales increase of 25 percent is forecast. All balance sheet items are expected to maintain the same percent of sales relationships as last year, except for common stock and retained earnings. No change in the number of common shares outstanding is scheduled and retained earnings will change as dictated by the profits and dividend policy of the firm a. Will external financing be required for the Prep Shop during the coming year? Yes ** D d BE O ENG 3 157 PM 20-06 pe here to search