lems Developing a Long-Term Financial Plan 17-1. (Financial forecasting) Zapater

Question

lems Developing a Long-Term Financial Plan 17-1. (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 Chief Financial Officer 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 million in sales with net income of $1.2 million. The firnm anticipates that next year's sales will reach $15 million with net income rising to $2 mi help defray the cost of new investments. lion. Given its present high rate of growth, the firm retains all of its earnings to

Explanation / Answer

sales cuurent year next year assets current year next year 12000000 15000000 current assets 3000000 3750000 fixed assets 6000000 7500000 total 9000000 11250000 total funding required for 2011 11250000 liabilites and owners equity net funding required 2250000 accounts payable 3000000 750000 long term debt 2000000 total liability 5000000 common stock 1000000 paid in capital 1800000 retained earnings 1200000 owers capital 4000000 total 9000000

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