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(Financial forecasting)

​(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 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 $12.4712.47 million in sales with net income of

​$1.221.22 million. The firm anticipates that next​ year’s sales will reach $15.7215.72 million with net income rising to $2.142.14 million. Given its present high rate of​ growth, the firm retains all of its earnings to help defray the cost of new investments. The​ firm’s balance sheet for the year just ended is as​ follows:  



Estimate​ Zapatera’s total financing requirements​ (total assets) and its net funding requirements​ (discretionary financing​ needed) for 2014.  


Use the percentage of sales given in Zapatera​ Enterprises’ balance sheet for 2013.

Zapatera​ Enterprises, Inc.  
Balance Sheet ​12/31/13 ​% of Sales
Current assets 2,600,000 20.850%
Net fixed assets 5,500,000 44.106%
Total 8,100,000
Liabilities and​ Owners’ Equity
Accounts payable 2,900,000 23.256%
​Long-term debt 1,600,000 NAa
Total liabilities 4,500,000
Common stock 1,000,000 NAa
​Paid-in capital 1,900,000 NAa
Retained earnings 700,000
Common equity 3,600,000
Total 8,100,000
NAa. This figure does not vary directly with sales and is assumed to remain constant for purposes of forecasting next​ year’s financing requirements.
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