(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 hig 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. Pro forma Balance Sheet Current assets Net fixed assets Total Liabilities and Owners' Equity Accounts payable Long-term debt Total liabilities Common stock Paid-in capital Retained earnings Common equity Total $ $ $ $ $ 12/31/14 Data table Zapatera Enterprises, Inc. Balance Sheet Current assets Net fixed assets Total Liabilities and Owners' Equity Accounts payable Long-term debt Total liabilities Common stock Paid-in capital Retained earnings Common equity Total 12/31/13 3,100,000 6,500,000 9,600,000 2,600,000 1,600,000 4,200,000 1,200,000 1,700,000 2,500,000 5,400,000 9,600,000 % of Sales 25.020% 52.462% 20.985% NAⓇ NA NAⓇ NA. This figure does not vary directly with sales and is assumed to remain constant for purposes of forecasting next year's financing requirements. (Click on the icon in order to copy its contents into a spreadsheet) X
(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 hig 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. Pro forma Balance Sheet Current assets Net fixed assets Total Liabilities and Owners' Equity Accounts payable Long-term debt Total liabilities Common stock Paid-in capital Retained earnings Common equity Total $ $ $ $ $ 12/31/14 Data table Zapatera Enterprises, Inc. Balance Sheet Current assets Net fixed assets Total Liabilities and Owners' Equity Accounts payable Long-term debt Total liabilities Common stock Paid-in capital Retained earnings Common equity Total 12/31/13 3,100,000 6,500,000 9,600,000 2,600,000 1,600,000 4,200,000 1,200,000 1,700,000 2,500,000 5,400,000 9,600,000 % of Sales 25.020% 52.462% 20.985% NAⓇ NA NAⓇ NA. This figure does not vary directly with sales and is assumed to remain constant for purposes of forecasting next year's financing requirements. (Click on the icon in order to copy its contents into a spreadsheet) X
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:(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 decimal places.
Pro forma Balance Sheet
Current assets
Net fixed assets
Total
Liabilities and Owners' Equity
Accounts payable
Long-term debt
Total liabilities
Common stock
Paid-in capital
Retained earnings
Common equity
Total
EA
SA
$
SA
GA
12/31/14
Data table
Zapatera Enterprises, Inc.
Balance Sheet
Current assets
Net fixed assets
Total
Liabilities and Owners' Equity
Accounts payable
Long-term debt
Total liabilities
Common stock
Paid-in capital
Retained earnings
Common equity
Total
12/31/13
3,100,000
6,500,000
9,600,000
2,600,000
1,600,000
4,200,000
1,200,000
1,700,000
2,500,000
5,400,000
9,600,000
% of Sales
25.020%
52.462%
20.985%
NAa
NAa
NAa
NA. This figure does not vary directly with sales and is assumed to remain
constant for purposes of forecasting next year's financing requirements.
(Click on the icon in order to copy its contents into a spreadsheet.)
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