4-1A. (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 Officerpredicts that the firms operating expenses, current assets, net fixed assets, and current liabilitieswill remain at their current proportion of sales.Last year Zapatera had $12 million in sales with net income of $1.2 million. The firm anticipatesthat next years sales will reach $15 million with net income rising to $2 million. Given its presenthigh rate of growth, the firm retains all of its earnings to help defray the cost of new investments.Balance Sheet year endCurrent AssetsNet Fixed AssetsTotal 12/31/03$3,000,0006,000,0009,000,000 % of Sales25%50% Liabilities and Owners EquityAccts Payable3,000,00025%Long-term Debt2,000,000*NaTotal Liability5,000,000Common Stock1,000,000*NaPaid-in Capitol1,800,000*NaRetained earnings1,200,000Common equity4,000,000Total9,000,000*Assumed to remain constant for purposes of making next years forecast of financing requirements.Estimate Zapateras total financing requirements (i.e. total assets) for 2004 and its not fundingrequirements.
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