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Problem 17-1 AFN equation Carter Corporation?s...

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Problem 17-1 AFN equation Carter Corporation?s sales are expected to increase from $5million in 2005 to $6million in 2006, or by 20 percent. Its assets totaled $3million at the end of the 2005. Carter is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2005, current liabilities are $1million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. The after -tax profit margin is forecasted to be 5 percent, and the forecasted retention ratio is 30 percent. Use the AFN equation to forecast Carter?s additional funds needed for the coming year

 

Paper#3860 | Written in 18-Jul-2015

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