Given the assumptions, what is the External Financing Need (EFN)? Revenue $200,000 Cost of Goods Sold 120,000
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Given the assumptions, what is the External Financing Need (EFN)?
Revenue $200,000
Cost of Goods Sold 120,000
Gross Profit 80,000
Operating Expenses 30,000
Operating Income 50,000
Interest Expense 10,000
Earnings before tax 40,000
Income tax expense (30%) 12,000
Net Income 28,000
Cash (min desired balance) 20,000
Accounts Receivable 40,000
Inventory 30,000
Property, Plant, & Equipment, net 150,000
Total Assets $240,000
Accounts payable 20,000
Long-term debt 120,000
Common Stock 40,000
Retained earnings 60,000
Total Liabilities and equity $240,000
Assumptions: Sales increase: 36%
Net Capex: $45,000
Operating margin: 30%
Interest expense: no change
Retention ratio: 40%
Expert Answer:
To calculate the External Financing Need EFN we need to consider the projected changes in assets and ... View the full answer
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