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The Manning Company has financial statements as shown next, which are representative of the company's historical average. The firm is expecting a 30 percent increase 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. Income Statement $270,000 217,400 52,600 8,800 $ 43,800 16,800 $ 27,000 10,800 Sales Expenses Earnings before interest and taxes Interest Earnings before taxes xes Earnings after taxes Dividends Balance Sheet Assets Liabilities and Stockholders' Equity Cash $ 28,400 2,100 4,600 $ 35,100 8,800 24,000 122,000 29,600 $ 219,500 6,000 Accounts payable 54,500 Accrued wages 61,000 Accrued taxes Accounts receivable Inventory $ 121,500 Current assets Current liabilities 98,000 Notes payable Long-term debt Common stock Retained earnings Fixed assets 219,500 Total liabilities and stockholders' equity Total assets Using the percent-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.) (Do not round intermediate calculations.) The firm

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