Broussard Skateboard's sales are expected to increase by 25% from $7

The information required for additional financing needs for the next year

• The sales in 2016 is $7,400,000
• The sales growth is 25%

Projected Sales in 2017 = Sales in 2015 * 125%
= $9,250,000

• The after-tax profit margin is forecasted to be 7% in 2017

After-Tax profit = Projected Sales in 2017 * After-tax profit margin
=$9,250,000 * 7%
= $647,500

• The projected dividend payout is 75% of after tax profits

Addition to retained earnings in 2017 = After-tax profit * (1 - Dividend payout ratio)
= $647,500 * ( 1- 0.75)
= $647,500 * 0.25
= $161,875

• The assets in 2016 are $3,000,000

Increase in assets in 2017 = Assets in 2016 * 25%
= $3,000,000 * 25%
=$750,000

Increase in liabilities in 2017 = (Accounts payable 2016 + Accruals in 2016) * 25%
=($450,000 + $450,000) * 25%
=$900,000 * 25%
=$225,000

The additional financing needs calculated below

AFN = Increase in assets - Increase in liabilities - addition to retained earnings
= $750,000 - $225,000 - $161,875
=$363,125

Broussard's additional fund's requirement for the coming year will be $363,125.