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Estimate JSN's total financing requirements (i.e., total assets) for 2002 and its net funding requirements

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A. JSN Enterprise is evaluating its financing requirements for the coming year. The firm has
only been in business for 1 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 JSN had $14 million in sales with net income of $1.4
million. The firm anticipates that next year's sales will reach $15 million with net income
rising to $2 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 the year just
ended is found below:
JSN Enterprises, Inc.
Balance Sheet
12/31/2001
% of Sales
Current assets
$4,000,000
25%
Net fixed assets
6.000,000
50%
Total
$10,000,000
Liabilities and Owners' Equity
Accounts payable
$4,000,000
25%
Long-term debt
1,000,000
NAa
Total liabilities
$5.000.000
Common stock
2,000,000
NA
Paid-in capital
1,900,000
NA
Retained earnings
1.100.000
Common equity
5.000.000
Total
$10,000,000
O
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A
- ) til ENG
9:48 PM
02-Nov-19

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