Question: Please help with the following problem. Someone else helped with it already and I have continuously gotten this problem wrong. This is my LAST attempt.
Please help with the following problem. Someone else helped with it already and I have continuously gotten this problem wrong. This is my LAST attempt.
Brigman Industries is evaluating its financing requirements for the coming year. The firm has been in business for only 1 year, but its CFO predicts that the firm's operating expenses, current assets, net fixedassets, and current liabilities will remain at their current proportion of sales.
Last year Brigman had
$15 million in sales and net income of $1.5 million. The firm anticipates that next year's sales will reach
$18.8 million, with net income rising to $1.65
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 2015 is found in the popup window:
BALANCE SHEET 12/31/2015 % OF SALES Current assets 3,750,000 25% Net fixed assets 9,000,000 60% Total 12,750,000 LIABILITIES AND OWNER'S EQUITY Accounts payable 3,000,000 20% Long-term debt 1,400,000 Total liabilities 4,400,000 Common stock 1,000,000 Paid-in capital 5,850,000 Retained earnings 1,500,000 Common equity 8,350,000 Total 12,750,000
. Estimate Zapatera's financing requirements (that is, total assets) for 2016 and its discretionary financing needs
(DFN).
Thank you!!
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