More on the AFN $($Additional Funds Needed$)$ equation

Green Caterpillar Garden Supplies Inc. reported sales of $$775,000$ at the end of last year, but this year, its sales are expected to grow by $9\%.$ Green

Caterpillar expects to maintain its current net profit margin of $22\%$ and a dividend payout ratio of $10\%.$ Remember that the net profit margin is

calculated by dividing the firm's net income by the its net sales $($EAT $/$ S$),$ and its dividend payout ratio is calculated by dividing the firm's common

dividends by its earnings after taxes $($D $/$ EAT$).$ The following information was taken from Green Caterpillar's balance sheet:

Based on the data above, the firm's AFN for the current year is

A positively signed AFN value represents:

A surplus of internally generated funds that can be invested in physical or financial assets or paid out as additional dividends

A point at which the funds generated within the firm equal the demands for funds to finance the firm's future expected sales requirements

A shortage of internally generated funds that must be raised outside the company to finance the company's forecasted future growth