home / study / business / accounting / questions and answers / zapatera enterpri
ID: 2724843 • Letter: H
Question
home / study / business / accounting / questions and answers / zapatera enterprises is evaluating its financing ... Question Zapatera Enterprises is evaluating its financing requirements for the coming year. The firm has been in business for only 1 year, but the CFO predicts 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 $12.73 million in sales and net income of $1.19 million. The firm anticipates that next year's sales will reach $15.96 million, with net incomerising to $2.08 million. Given its present high rate of growth, the firm retains all its earnings to help defray the cost of new investments. The firm's balance sheet for 2013 is found below: Current assets $3 million net fixed assets $5.6 million Accounts payable $3.2 million long-term debt $1.9 million Common stock $1.3 million paid-in capital $1.7 million retained earnings $500K common equity $3.5 million. Estimate Zapatera's financing requirements(that is, total assets) for 2014 and its discretionary financing needs(DFN) I need to know how to get the 2014 figure for Common Equity and DFN. Please.
Explanation / Answer
Zapatera Enterprises All Amounts in $ million Balance Sheet as on 2013 Income Statement for 2014 Assets % to Sales Sales 15.96 Net Income 2.08 Current Assets 3 23.57% Net Fixed Assets 5.6 43.99% Balance Sheet for 2014 (Estimated) Total Assets 8.6 Assets % to Sales Liabilities Current Assets 3.76 23.57% Accounts Payable 3.2 25.14% Net Fixed Assets 7.02 43.99% Long-Term Debt 1.9 Total Assets 10.78 Common Stock 1.3 Additional Paid-in Capital 1.7 Liabilities Retained Earnings 0.5 Total Liabilities 8.6 Accounts Payable 4.01 25.14% Long-Term Debt 1.90 Additional Funding Required 1.37 Common Stock 1.30 Additional Paid-in Capital 1.70 Retained Earnings 0.50 Common Equity 3.50 Total Liabilities 10.78
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.