AFN: company generates 2.0 million in sales during 2013 and its year end total a

Question

AFN: company generates 2.0 million in sales during 2013 and its year end total assets were 1.3 million. Also year end 2013 current liabilities were 1.0 million consisting of 300.000 notes payable, 500,000 accounts payable and 200,000 accruals looking ahead 2014 company assets will increase at the same rate spontaneous liabilities will increase at the same rate as sales profit margin will be 6% and payout 50%. How large a sales increase can company achieve without having to raise funds externally. That is what is self-supporting growth rate? Sales increase by ? And that is by what percentage? AFN: company generates 2.0 million in sales during 2013 and its year end total assets were 1.3 million. Also year end 2013 current liabilities were 1.0 million consisting of 300.000 notes payable, 500,000 accounts payable and 200,000 accruals looking ahead 2014 company assets will increase at the same rate spontaneous liabilities will increase at the same rate as sales profit margin will be 6% and payout 50%. How large a sales increase can company achieve without having to raise funds externally. That is what is self-supporting growth rate? Sales increase by ? And that is by what percentage?

Explanation / Answer

2013 $ In Lacs Sales $20.00 Total Assets $13.00 Current Liabilities Notes Payble $3.00 Account Payble $5.00 Accruals $2.00 Total $10.00 Profit Margin $1.20 Payout 50% Retantion Ratio 50% Return on Assets 9.23% Growth Rate=(b*r) 4.62% Sale Increase by $0.92

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