The manning company has financial statements as shown below

The manning company has financial statements as shown below on page 115, which are representative of the company’s historical average. The firm is expecting a 20% in sales next year, and management is concerned about the company’s need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales. Using the present-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit margin and payout ratio must be found from the income statement.)Income statementSales…………………………………………………………………………. $200.000Expenses…………………………………………………………….. 158,000Earnings before interest and taxes…………………………….. $ 42,000Interest…………………………………………………………………….. 7,000Earnings be taxes…………………………………………………….. $ 35,000Taxes…………………………………………………………………. 15,000Earnings after taxes……………………………………………… $ 20,000Dividends…………………………………………………………… $ 6,000Balance Sheet Assets LiabilitiesCash………………………. $ 5,000 Accounts Payable………… $ 25,000Accounts Receivable……..40,000 Accrued wages…………. 1,000Inventory……………….. 75,000 Accrued Taxes……… 2,000 Current Assets……. .$ 120,000 Current liabilities….. $ 28,000Fixed assets………. 80,000 Notes payable………. 7,000 Long term debts…… 15,000 Common Stock….. 120,000 Retained earnings….. 30,000 Total liabilities andTotal Assets………..$ 200,000 stockholders’ equity… $ 200,000