Subject of Financial Management

Ziegen, Inc. Ziegen sales were RM 10 million and the firm was able to earn net income equal to RM 500,000 in 2018. Ziegen's financial analysts also estimates that the firm will earn 5% of the projected RM 12 million in sales forecast for 2019. Also, Ziegen plans to retain half (50%) of its earnings and reinvest in the firm while paying a like amount in dividends. Ziegen, Inc. income statement for Ziegen, Inc Pro Forma Income Calculation % of 2018 Sales 2018 Statement for 2011 Calculation Sales growth rate Sales RM 10,000,000 Sales 10m x 1.2% RM 12,000,000 Net income RM 500,000 Net income 12m x 5% x 5% Ziegen, Inc. Balance sheet for 2018 Calculation % of 2018 Sales Ziegen, Inc Pro Forma Income Calculation Statement for 2011 Current assets RM 2,000,000 Current assets Net fixed assets 4,000,000 Net fixed assets Total RM 6,000,000 Total Account payable RM 1,000,000 Account payable Accrued payment 1,000,000 Accrued payment Notes payable 500,000 N/A Notes payable No change 500,000 Current liabilities 2,500,000 Current liabilities Long-term debt 2,000,000 N/A Long-term debt No change 2,000,000 Total liabilities 4,500,000 Total liabilities Common stock 100,000 N/A Common stock No change 100,000 Paid-in-capital 200,000 N/A Paid-in-capital No change 200,000 Retained earnings 1, 200,000 Retained earnings Total equity 1,500,000 Total equity Total 6,000,000 Projected sources of financing Discretionary financing needs Total financing needs