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 11.71 million in sales with net income of 1.23 million. The firm anticipates that next year’s sales will reach 14.39 million with net income rising to 2.17 million. Given its present rate of growth, the firm retains all of its earnings to help defray the cost of new investments.
Estimate Zapater’s total financing requirements (total assets) and its net funding requirements (discretionary financing needed) for 2014. Note: Use the percentage of sales in Zapatera Enterprises’ balance sheet for 2013. Hint: Make sure to round all intermediate calculations to at least five decimal places.
The 2014 retained earnings are? ___________________
Complete the pro forma balance sheet for 2014 below:
Pro forma Balance Sheet 12/21/2014
Current Assets
Net fixed assets
total
Liabilitites and Owners' Equity
Accounts payable
Long-term debt
Total liabilities
Common stock
Paid-in capital
Retained earnings
Cpmmon equity
Total
The firm’s balance sheet for the year just ended is as follows:
Balance sheet
current assets 3500000 29.787%
net fixed assets 5700000 48.511%
total 9200000
liabilitites and owner equity
accounts payable 2600000 22.128%
long-term debt 1900000 na
total liabilitites 45000000
common stock 1400000 na
paid-in capital 1900000 na
reatined earnings 1400000
common equity 4700000
total 9200000