Question

Green Moose Industries reported sales of $890,000 at the end of last year; but this year, sales are expected to grow by 8%. Green Moose expects to maintain its current profit margin of 24% and dividend payout ratio of 20%. The firm’s total assets equaled $500,000 and were operated at full capacity. Green Moose’s balance sheet shows the following current liabilities: accounts payable of $65,000, notes payable of $25,000, and accrued liabilities of $60,000. Based on the AFN (Additional Funds Needed) equation, what is the firm’s AFN for the coming year?

          Green Moose Industries reported sales of $890,000 at the end of last year; but this year, sales are expected to grow by 8%. Green Moose expects to maintain its current profit margin of 24% and dividend payout ratio of 20%. The firm’s total assets equaled $500,000 and were operated at full capacity. Green Moose’s balance sheet shows the following current liabilities: accounts payable of $65,000, notes payable of $25,000, and accrued liabilities of $60,000. Based on the AFN (Additional Funds Needed) equation, what is the firm’s AFN for the coming year?

Added by Joshua T.

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