Pierce furnishings generated $2 million in sales during 2008, and its year-end total assets were $1.5 million. Also, at year-end 2008, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,000 of accrued liabilities. Looking ahead to 2009, the company estimates that its assets must increase by $.75 for every $1.00 increase in sales. Pierces profit margin is 5%, and its payout ratio is 40%. How large a sales increase can the company achieve without having to raise funds externally.
Paper#10323 | Written in 18-Jul-2015Price : $25