Financial forecasting) Zapatera Enterprises is evaluating its financing requirements for the coming year. The firm has only been in business for one year, but its CFO predicts that the firm's operating expenses, current assets, net fixed assets, and current liabilities will remain at their current proportion of sales. Last year Zapatera had $11.76 million in sales with net income of $1.15 million. The firm anticipates that next year's sales will reach $15.11 million with het income rising to $2.16 million. Given its present high rate of growth, the firm retains all of its earnings to help defray the cost of new investments. The firm's balance sheet for the year just ended is as follows: Estimate Zapatera's total financing requirements (total assets) and its net funding requirements (discretionary financing needed) for 2014. Note: Use the percentage of sales given in Zapatera Enterprises' balance sheet for 2013. Hint: Make sure to round all intermediate calculations to at least five decimal places.

Financial forecasting) Zapatera Enterprises is evaluating its financing requirements for the coming year. The firm has only been in business for one year, but its CFO predicts that the firm's operating expenses, current assets, net fixed assets, and current liabilities will remain at their current proportion of sales. Last year Zapatera had $11.76 million in sales with net income of $1.15 million. The firm anticipates that next year's sales will reach $15.11 million with het income rising to $2.16 million. Given its present high rate of growth, the firm retains all of its earnings to help defray the cost of new investments. The firm's balance sheet for the year just ended is as follows: Estimate Zapatera's total financing requirements (total assets) and its net funding requirements (discretionary financing needed) for 2014. Note: Use the percentage of sales given in Zapatera Enterprises' balance sheet for 2013. Hint: Make sure to round all intermediate calculations to at least five decimal places.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 7P

See similar textbooks

Similar questions

(Forecasting financing needs) Beason Manufacturing forecasts its sales next year to be $5.6 million and expects to earn 4.3 percent of that amount after taxes. The firm is currently in the process of projecting its financing needs and has made the following assumptions (projections): • Current assets are equal to 19.3 percent of sales, and fixed assets remain at their current level of $1.1 million. • Common equity is currently $0.75 million, and the firm pays out half of its after-tax earnings in dividends. • The firm has short-term payables and trade credit that normally equal 12.1 percent of sales, and it has no long-term debt outstanding. What are Beason's financing needs for the coming year? Beason's expected net income for next year is $ 240,800 (Round to the nearest dollar.) Beason's expected common equity balance for next year is $ 870400. (Round to the nearest dollar.) Estimate Beason's financing needs by completing the pro forma balance sheet below: (Round to the nearest…
(Forecasting financing needs) Beason Manufacturing forecasts its sales next year to be $5.4 million and expects to earn 4.9 percent of that amount after taxes. The firm is currently in the process of projecting its financing needs and has made the following assumptions (projections): • Current assets are equal to 19.8 percent of sales, and fixed assets remain at their current level of $0.8 million. • Common equity is currently $0.78 million, and the firm pays out half of its after-tax earnings in dividends. The firm has short-term payables and trade credit that normally equal 11.8 percent of sales, and it has no long-term debt outstanding. What are Beason's financing needs for the coming year? Beason's expected net income for next year is $ (Round to the nearest dollar.)
(Financial forecasting) Zapatera Enterprises is evaluating its financing requirements for the coming year. The firm has only been in business for one year, but its CFO predicts that the firm's operating expenses, current assets, net fixed assets, and current liabilities will remain at their current proportion of sales. Last year Zapatera had $12.39 million in sales with net income of $1.22 million. The firm anticipates that next year's sales will reach $15.54 million with net income rising to $2.17 million. Given its present high rate of growth, the firm retains all of its earnings to help defray the cost of new investments. The firm's balance sheet for the year just ended is as follows: Estimate Zapatera's total financing requirements (total assets) and its net funding requirements (discretionary financing needed) for 2014. Note: Use the percentage of sales given in Zapatera Enterprises' balance sheet for 2013. Hint: Make sure to round all intermediate calculations to at least five…
Use the percentage of sales forecasting method to compute the additional financing needed by Lambrechts Specialty Shops, Inc. (LSS), if sales are expected to increase from a current level of $20 million to a new level of $25 million over the coming year. LSS expects earnings after taxes to equal $1 million over the next year. LSS intends to pay a $300,000 dividend next year. The current year balance sheet for LSS is as follows: Lambrechts Specialty Shops, Inc. Balance Sheet as of December 31, 20X3 Cash $1,000,000 Accounts payable $3,000,000 Accounts receivable 1,500,000 Notes payable 3,000,000 inventories 6,000,000 Long-term debt 2,000,000 Net fixed assets 3,000,000 Stockholders’ equity 3,500,000 Total Assets $11,500,000 Total…
Use the percentage of sales forecasting method to compute the additional financing needed by Lambrechts Specialty Shops, Inc. (LSS), if sales are expected to increase from a current level of $20 million to a new level of $25 million over the coming year. LSS expects earnings after taxes to equal $1 million over the next year. LSS intends to pay a $300,000 dividend next year. The current year balance sheet for LSS is as follows: Lambrechts Specialty Shops, Inc. Balance Sheet as of December 31, 20X3 Cash $1,000,000 Accounts Payable $3,000,000 Accounts Receivable 1,500,000 Notes Payable 3,000,000 Inventories 6,000,000 Long-Term Debt 2,000,000 Net Fixed Assets 3,000,000 Stockholders’ Equity 3,500,00 Total Assets $11,500,000 Total Liabilities and Equity $11,500,000
The table below shows the forecast cash flow information of Good Time Inc. for the nextyear. The required debt payment in the next year is $88 million, with a current market valueof $60 million. The company pays no tax. If you invest in the corporate debt of Good TimeInc. today, what is your expected return on this investment?
Green Caterpillar Garden Supplies Inc. has the following end-of-year balance sheet: Green Caterpillar Garden Supplies Inc. Balance Sheet For the Year Ended on December 31 Assets Liabilities Current Assets: Current Liabilities: Cash and equivalents Accounts payable Accounts receivable Accrued liabilities Inventories Total Current Assets Net Fixed Assets: Net plant and equipment (cost minus depreciation) Total Assets $150,000 400,000 350,000 $900,000 $2,100,000 $3,000,000 Notes payable Total Current Liabilities Long-Term Bonds Total Debt Common Equity Common stock Retained earnings Total Common Equity Total Liabilities and Equity $250,000 150,000 100,000 $500,000 1,000,000 $1,500,000 800,000 700,000 $1,500,000 $3,000,000
The table below shows the forecast cash flow information of Good Time Inc. for the nextyear. The required debt payment in the next year is $88 million, with a current market valueof $60 million. The company pays no tax. If you invest in the corporate debt of Good TimeInc. today, what is your expected return on this investment? hand write please
Happy Time Inc. is expected to generate the following cash flows for the next year, as shown in the table below. Happy Time now only has one outstanding debt with a face value of $110 million to be repaid in the next year. The current market value for the debt is $67 million. The tax rate is zero. If you invest in the corporate debt of Happy Time Inc. today, what is your expected percentage return on this investment? Cash flow in the next year Economy Probability Amount Boom 0.3 Normal 0.4 Recession 0.3 O 36.87% O -26.37% 64.8% O-16.63% $110 million $101 million $61 million
Chachagogo, Inc. is planning its operations for next year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in your forecast are shown below. Based on the AFN equation, what is the AFN for the coming year? Last year's sales P200,000 Sales growth rate 40% Last year's current assets 65,000 Last year's noncurrent assets 70,000 Last year's profit margin 20.0% L last year's accounts payable P50,000 Last year's notes payable P25,000 Last year's accruals P20,000 Target plowback ratio 75.0% choices: -44,000 -50,000 -54,000 -16,000 -40,000 Jonson, Inc. is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the retention ratio from 90% that was used in the past to 50%, which the firm's investment bankers have recommended. Seventy-five percent of the total assets are considered…
For the next fiscal year, you forecast net income of $51,100 and ending assets of $506,900. Your firm's payout ratio is 10.2%. Your beginning stockholders' equity is $298,800, and your beginning total liabilities are $120,700. Your non-debt liabilities, such as accounts payable, are forecasted to increase by $10,000. What will be your net new financing needed for next year? The net financing required will be $. (Round to the nearest dollar.) C
1. Use the percentage of sales forecasting method to compute the additional financing needed by Lambrechts Specialty Shops, Inc. (LSS), if sales are expected to increase from a current level of $20 million to a new level of $25 million over the coming year. LSS expects earnings after taxes to equal $1 million over the next year. LSS intends to pay a $300,000 dividend next year. The current year balance sheet for LSS is as follows: