Profit Margin Finance Assignment Help
In business studies, learners are taught about different things including how to make a profit. Getting profit is the main advantage of having a business which is an indication of growth and success. Therefore, learners are equipped with this knowledge to ensure the growth of the organization. However, some find the subject challenging to get help by contacting my homework writers. The question below is an example of commonly asked in assignments.
More on the AFN (Additional Funds Needed) equation
Green Caterpillar Garden Supplies Inc. reported sales of $720,000 at the end of last year, but this year, sales are expected to grow by 6%. Green Caterpillar expects to maintain its current profit margin of 22% and dividend payout ratio of 25%. The following information was taken from Green Caterpillar’s balance sheet:
Total assets: $400,000
Accounts payable: $75,000
Notes payable: $35,000
Accrued liabilities: $80,000
Based on the AFN equation, the firm’s AFN for the current year is———
A positively signed AFN value represents:
A shortage of internally generated funds that must be raised outside the company to finance the company’s forecasted future growth.
A point at which the funds generated within the firm equal the demands for funds to finance the firm’s future expected sales requirements.
A surplus of internally generated funds that can be invested in physical or financial assets or paid out as additional dividends.
Because of its excess funds, Green Caterpillar Garden Supplies Inc. is thinking about raising its dividend payout ratio to satisfy shareholders. Green Caterpillar could pay out —————- of its earnings to shareholders without needing to raise any external capital. (Hint: What can Green Caterpillar increase its dividend payout ratio to before the AFN becomes positive?)
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