Question

Barrion Ltd. had sales of R10m last year and expects sales of R15m this year. All...

Barrion Ltd. had sales of R10m last year and expects sales of R15m this year. All assets and liabilities move spontaneously in proportion to its sales. The company had assets of R50m, liabilities of R30m and a net profit margin of 30%. The company maintains a retention ratio of 50%. Using the percentage of sales method, determine the funding requirements for Barrion Ltd. for the coming year

A. R7.75m

B. R15.50m

C. R25.00m

D. R37.25m

Homework Answers

Answer #1

EFN = A : 7.75

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Last year XYZ (Pty) Ltd had sales of R202 601, assets of R126 178, a profit...
Last year XYZ (Pty) Ltd had sales of R202 601, assets of R126 178, a profit margin of 5.3%, and an equity multiplier of 1.3. The CFO believes that the company could reduce its assets by R20154 without affecting either sales or costs. Had it reduced its assets in this amount, and had the debt-to-asset ratio, sales and costs remained constant, by how much would the ROE have changed?
The profit margin is 10% and the retention ratio is 30%. Last year’s sales were $50...
The profit margin is 10% and the retention ratio is 30%. Last year’s sales were $50 million and total assets were $40 million. None of the liabilities vary directly with sales, but assets and costs do. If the sales growth rate is 20%, how much external financing is needed? Please show your work!
Bohemian Manufacturing Company reported sales of $720,000 at the end of last year; but this year,...
Bohemian Manufacturing Company reported sales of $720,000 at the end of last year; but this year, sales are expected to grow by 8%. Bohemian expects to maintain its current profit margin of 20% and dividend payout ratio of 15%. The firm’s total assets equaled $400,000 and were operated at full capacity. Bohemian’s balance sheet shows the following current liabilities: accounts payable of $70,000, notes payable of $30,000, and accrued liabilities of $60,000. Based on the AFN (Additional Funds Needed) equation,...
A company’s sales last year were $50000 and it operated at full capacity. Its sales this...
A company’s sales last year were $50000 and it operated at full capacity. Its sales this year are expected to increase by 20%. The company needs $0.5 of assets per dollar of sales to operate and its current liabilities are $0.05 per dollar of sales. The company’s profit margin is 3% and its dividend payout ratio is 30%. What amount of additional funds does the company need to support this year’s projected sales?
Green Caterpillar Garden Supplies Inc. reported sales of $775,000 at the end of last year; but...
Green Caterpillar Garden Supplies Inc. reported sales of $775,000 at the end of last year; but this year, sales are expected to grow by 7%. Green Caterpillar expects to maintain its current profit margin of 20% and dividend payout ratio of 10%. The firm’s total assets equaled $400,000 and were operated at full capacity. Green Caterpillar’s balance sheet shows the following current liabilities: accounts payable of $70,000, notes payable of $30,000, and accrued liabilities of $70,000. Based on the AFN...
The company Jalil Corp is planning its operations in the coming year and the board of...
The company Jalil Corp is planning its operations in the coming year and the board of directors asked you to prepare a forecast regarding the Additional Fund Needed. The company operates at full capacity. The data used for the calculation of forecasting funding requirements is below. The Board of Directors plans a change in dividend policy, initially the Payout Ratio of 10% was increased to 50%. Question How much is the need for additional funds in the coming year based...
The company Jalil Corp is planning its operations in the coming year and the board of...
The company Jalil Corp is planning its operations in the coming year and the board of directors asked you to prepare a forecast regarding the Additional Fund Needed. The company operates at full capacity. The data used for the calculation of forecasting funding requirements is below. The Board of Directors plans a change in dividend policy, initially the Payout Ratio of 10% was increased to 50%. Question How much is the need for additional funds in the coming year based...
The company Jalil Corp is planning its operations in the coming year and the board of...
The company Jalil Corp is planning its operations in the coming year and the board of directors asked you to prepare a forecast regarding the Additional Fund Needed. The company operates at full capacity. The data used for the calculation of forecasting funding requirements is below. The Board of Directors plans a change in dividend policy, initially the Payout Ratio of 10% was increased to 50%. Question How much is the need for additional funds in the coming year based...
Owen’s Electronics has nine operating plants in seven southwestern states. Sales for last year were $100...
Owen’s Electronics has nine operating plants in seven southwestern states. Sales for last year were $100 million, and the balance sheet at year-end is similar in percentage of sales to that of previous years (and this will continue in the future). All assets (including fixed assets) and current liabilities will vary directly with sales. The firm is working at full capacity. Balance Sheet (in $ millions) Assets Liabilities and Stockholders' Equity Cash $ 11 Accounts payable $ 23 Accounts receivable...
A company’s sales last year were $72 million and it operated at full capacity. Its sales...
A company’s sales last year were $72 million and it operated at full capacity. Its sales this year are expected to increase by 8.7%. The company needs $0.55 of assets per dollar of sales to operate and its current liabilities are $0.11 per dollar of sales. The company’s profit margin is 4.1% and its dividend payout ratio is 60%. What amount of additional funds does the company need to support this year’s projected sales?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT