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Mrac [35]
3 years ago
10

Antivirus Inc. expects its sales next year to be $2,500,000. Inventory and accounts receivable will increase $480,000 to accommo

date this sales level. The company has a steady profit margin of 15 percent with a 35 percent dividend payout. How much external financing will the firm have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing.
Business
1 answer:
DiKsa [7]3 years ago
8 0

Answer:

$236,250

Explanation:

The computation of external financing is shown below:-

For computing the external financing first we need to find out the retained earning which is shown below:-

Net income = Sales × Profit margin

= $2,500,000 × 15%

= $375,000

Increase in retained earning = Net income - Dividends

= $375,000 - ($375,000 × 35%)

= $375,000 - $131,250

= $243,750

External financing = Increase in assets - Increase in retained earning

= $480,000 - $243,750

= $236,250

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The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is referred to as the investing activities.

The operating activities has to do with the reporting of cash payment for wages. The financing activities has to do with reporting issuance cash for the common stock.

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By Focusing on Key Performing Indicators (KPIs)

Explanation:

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<h3>What are receiving reports?</h3>

Receiving reposts is a kind of tool that is used to list, document or note all the transaction details of the businesses. It is generally updated and maintained by those employees of the staff who are responsible for receiving or accepting the delivery of goods.

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5 0
2 years ago
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Explanation:

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A company reported total equity of $157,000 at the beginning of the year. The company reported $222,000 in revenues and $171000
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