Calculate the internal growth rate for the company, assuming that both beginning and ending of period total assets are used. What do you notice?
What is the sustainable growth rate, and what is it if you use beginning of period equity or end of period equity?
What growth rate could be supported with no outside financing at all?
Calculate the sustainable growth rate.
What must total asset turnover be?
What profit margin must the firm attain in order to maintain their growth rate?
How much in new fixed assets are required to support this growth in sales?
How quickly can sales grow before any new fixed assets are needed?
Assuming the following ratios are given, determine the sustainable growth rate:
- Total asset turnover
- Profit margin
- Equity multiplier
- Payout ratio
Calculate the sustainable growth rate given the following information.
- Profit margin
- Capital intensity ratio
- Debt-equity ratio
- Net income
- Dividends