Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the year just ended were $9.4 million. The firm also has a profit margin of 20 percent, a retention ratio of 25 percent, and expects sales of $7.4 million next year.
Assets Liabilities and Equity Current assets = $476,000
Current liabilities = $964,440
Fixed assets = 4,600,000
Long-term debt = 1,800,000
Equity = 2,311,560
Total assets = $5,076,000
Total liabilities and equity = $5,076,000
If all assets and current liabilities are expected to shrink with sales, what amount of additional funds will Gyp Sum need from external sources to fund the expected growth? (Enter your answer in dollars not in millions. Negative amount should be indicated by a minus sign.)
