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Problem 4-29 Percent-of-sales method [LO4-3] Conn Man's Shops, a national clothing chain, had sales of $340 milion last year. The business has a steady net profit margin of 8 percent and a dividend payout ratio of 35 percent. The balance sheet for the end of last year is shown. The firmst marketing stait has told the president that in the coming year there will be a large inctease in the deinand fot overcoats and wool stacks. A sales inceease of 20 percent is forecast for the compociny All balance sheet items are expected to maintain the same percentof sales relationships as fastyear, except for coinmoin stock and tetained earnings No change is scheduled in the number of common stock shares gutstanding and retained earnings wit change as dictated by the profits and dividend policy of the fim. (Remember, the net profit irtargin is 8 petcent). "Thus includes fored assets, since the fiem so at full eapocny 'This includes fixed assets, since the firm is at full capacity. a. Will external financing be required for the company during the coming year? No Yes b. What would be the need for external financing if the net profit margin went up to 10.00 percent and the dividend payout ratio was increased to 60 percent? Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your onswer in dollars, not millions, (e.g. $1,234,567). Input your answer as positive a value

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