Chapter 9: Problem 9-1 AFN equation Broussard Skateboardâ??s sales are expected to increase by 15% f

Chapter 9: Problem 9-1
AFN equation Broussard
Skateboard’s sales are expected to increase by 15% from $8 million in 2012 to
$9.2 million in 2013. Its assets totaled $5 million at the end of 2012.
Broussard is already at full capacity, so its assets must grow at the same rate
as projected sales. At the end of 2012, current liabilities were $1.4 million,
consisting of $450,000 of accruals. The after-tax profit margin is forecasted
to be 6%, and the forecasted payout ratio is 40%. Use the AFN equation to forecast
Broussard’s additional funds needed for the coming year.
AFN = $238,800

Chapter 9: Problem 9-4
Sales IncreaseMaggie’s Muffins, Inc., generated $5,000,000 in sales during 2012, and
its year-end total assets were $2,500,000. Also, at year-end 2012, current
liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000
of accounts payable, and $200,000 of accruals. Looking ahead to 2013, the
company estimates that its assets must increase at the same rate as sales, its
spontaneous liabilities will increase at the same rate as sales, its profit
margin will be 7%, and its payout ratio will be 80%. How large a sales increase
can the company achieve without having to raise funds externally: that is, what
is its self-supporting growth rate?
?S = $202,312