Genatron Manufacturing expects its sales to increase by 10 percent in 2013. Estimate the firm's external financing needs by using the percent-of-sales method for the 2012 data. Assume that no excess capacity exists and that one-half of the 2012 net income will be retained in the business.
EFN = ((TA/NS)*(deltaNS)) - (((AP + AC)/NS)*deltaNS) - (((NS13)*(NPM))/(NS)*(RR))
2013 Forecasted sales (NS13)
Change in sales (?NS)
Total assets (TA)
Net sales (NS)
Accounts payable (AP)
Accruals (AC)
Net profit margin (NPM)
Percent of net income retained in firm (RR)