I need help calculating Brigman\'s financing requirements and their discretionar

Question

I need help calculating Brigman's financing requirements and their discretionary financing needs for 2016.

This Question: 1 pt 6 of 24 This Test: 24 pts possible (Financial forecasting) Brigman Industries is evaluating its financing requirements for the coming year. The firm has been in business for only 1 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. t year Brigman had $11 million in sales and net income o $1.1 million. The imm anticipates that next year's sales will reach?13.8 million with net income nsng to $1.21 million. Given its present high rate o growth the firm retains al eamings to help defray the cost of new ivestments. The firm's balance sheet for 2015 is found in the popup window: Estimate Zapatera's financing requirements (that is, total assets) for 2016 and its discretionary financing needs (DFN. What are Brigman's financing requirements (that is, total assets) for 2016? (Round to the nearest dollar.) What are Brigman's discretionary financing needs (DFN) for 2016? (Round to the nearest dcllar.) BALANCE SHEET 12/31/2015 $2,750,000 6,600,000 S9,350,000 % OF SALES 25% 60% Current assets Net foed assets Total Accounts payable Long-term debt Total liabilities Common stock Paid-in capital Retained eanings Common equity LIABILITIES AND OWNER'S EQUITY S2,750,000 1,200,000O S3,950,000 1,000,000 3,300,000 1,100,000 5,400,000 $9,350,000 25% NA NA NA Total "Not applicable. This figure does not vary directly with sales and is assurmed to remain constant for purposes of making next years forcast of financing requirements. (Click on the icon located on the top-right comer of the data table above in order to copy its contents into a spreadsheet.) Print Done Enter your answer in each of the answer boxes.

Explanation / Answer

2016 Sales 13800000 Net Income 1210000 2016 Current Assets 3450000 25%*Sales Net Fixed Assets 8280000 60%*Sales Total 11730000 Accounts Payable 3450000 25%*Sales Long Term Debt 1200000 Total Liabilities 4650000 Common Stock 1000000 Paid in Capital 3300000 Retained Earnings 2310000 Common Equity 6610000 Total 11260000 Additional Requirements 11730000-11260000 470000 2016 Current Assets 3450000 25%*Sales Net Fixed Assets 8280000 60%*Sales Total 11730000 Accounts Payable 3450000 25%*Sales Long Term Debt 1200000 Total Liabilities 4650000 Common Stock 1000000 Paid in Capital 3300000 Retained Earnings 2310000 Common Equity 6610000 Discretionary finance 470000 Total 11730000 Financing Requirements $11,730,000 Discretionary Financing Needs $470,000

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