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Zapatera Enterprises

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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 $12,000,000 in sales with net income of 1,200,000 The firm
anticipates that next year’s sales will reach 15,000,000 with net income rising to 2,000,000
Given its present high rate of growth, the firm retains all of its earnings to help defray the cost
of new investments.

12/31/10 % of sales
Current assets  3,000,000 25%
Net Fixed assets  6,000,000 50%
   Total   9,000,000
Liabilities and Owner's equity
Accounts payable  3,000,000 25%
Long-term debt  2,000,000
  Total liabilities  5,000,000
Common stock  1,000,000
Paid in capital  1,800,000
Retained earnings  1,200,000
Common equity  4,000,000
   Total  9,000,000

Estimate Zapatera’s total financing requirements (total assets) and its net funding
requirements (discretionary financing needed) for 2011.

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