Last Year's Sales(S)=$451,000.
Last Year's Accounts Payable(AP)=$40,000.
Last Year's Total Assets(TA)=$103,000.
Sales Growth(DS)=$140,000.
Last Years Notes Payable+Accruals (Accured
Liabilities)=$10,000+$10,000= $20,000.
Last Year's Net Income(NI)=0.25*451,000
=$1,12,750.
Target PayOut=0.4*112750.
=$45,100.
Retention Ratio(RR)=1,12,750-45,100=$67650.
This Year's Profit=0.25*591,000=$147750.
This Year's Retention Ratio=(1-0.4)*147750=88,650.
Next Year's Profit=0.25*731,000=182,750
Next Year's Retention Ratio=(1-0.4)*182750.=$109650.
AFN For Last Year=TA/S(DS)-(AP+AL)S-(S)*(NI/S)*RR.
=(103,000/451,000)*140,000-(40,000+20,000/451,000)*140,000-451,000*(112,750/451,000)*0.6
=31973.39-18625.28-67650=-54301.88.
AFN For This
Year=(103,000/591,000)*140,000-(60,000/591,000)*140,000-591,000(147750/591,000)*0.6
=24399.32-14213.20-88650=-78463.87
=(103,000/731,000)*140,000-(60,000/731,000)*140,000-731,000*(182,750/731,000)*0.6
=-101414.71
