1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
mrs_skeptik [129]
3 years ago
12

You are given the following information on Kaleb's Welding Supply: Profit margin 6.9 % Capital intensity ratio .78 Debt–equity r

atio .9 Net income $ 86,000 Dividends $ 16,800 Calculate the sustainable growth rate. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Sustainable growth rate % This
Business
1 answer:
Tatiana [17]3 years ago
6 0

Answer:

0.1563946140 or 15.64%

Explanation:

The computation of the sustainable growth rate is shown below:

But before that we need to do the following calculations

As we know that

Profit margin = net income ÷ Sales

So,

0.069 = $86,000 ÷ Sales

Sales = $1,246,376.81159

Now

Capital intensity ratio = Total assets ÷ Sales

Total assets is

= $1,246,376.81159 × 0.78

= $972,173.91304

And,

Debt - Equity ratio = Debt ÷ Equity = 0.9

Now, if debt is 0.9, and equity is 1, Thereforetotal assets is 1.9 (0.9 + 1).

So,

Equity = Total assets x 1 ÷ 1.9

= $972,173.91304 ÷ 1.9

= $511,670.480547

And,  

Return on Equity (ROE) = Net income ÷ Equity

= $86,000 ÷ $511,670.480547

= 0.16807692307 or 16.807692307%

And,

Dividend payout ratio = Dividend ÷ net income

= $16,800 ÷ $86,000

= 0.1953488372

Now  

Retention ratio (b) = 1 - dividend payout

= 1 - 0.1953488372

= 0.8046511628

So,  

Sustainable growth rate (SGR) = (ROE x b) ÷ [ 1 - (ROE × b) ]

= (0.16807692307% × 0.8046511628) ÷ [ 1 - (0.16807692307% × 0.8046511628) ]

= 0.1563946140 or 15.64%

You might be interested in
What is one force facing U.S businesses today ?
Rashid [163]
Employee healthcare , hiring employee increeccing profit
5 0
2 years ago
Records at Hal’s Accounting Services show the following costs for year 1. Direct materials and supplies $ 40,000 Employee costs
ruslelena [56]

Answer:

See answers below

Explanation:

a. Direct materials & supplies  $40,000 = $40,000 × 110%

= $44,000 × 20,000/25,000

= $35,200

Employee costs = $2,900,000 × 105%

= $3,045,000 × 20,000/25,000

= $2,346,000

Variable overhead = $600,000 × 100%

= $600,000 × 20,000/25000

= $480,000

Fixed overhead = $700,000 × 105%

= $735,000

b. Total costs per unit year 2 =

$3,596,000 / 20,000

= $179.81

6 0
3 years ago
Which of the following is the best example of amortization?
weeeeeb [17]
Answer is 30 yr mortgage
3 0
3 years ago
Herbert and lily wanted to purchase a new set of curtains for their bedroom. however, they could not decide upon which color to
Yakvenalex [24]

Answer:

The answer is gender.

Explanation:

The difference between the choices that Herbert and Lily make on the curtains they prefer are mainly due to gender differences typically associated with masculinity and femininity. Herbert’s preferred curtain, which is solid dark blue, reflects his masculine preference in colors, since he picked blue. Lily, on the other hand, showcases a feminine preference with lilac-colored curtains; which is a soft shade that feminine women tend to prefer combined, in addition to the embroidery style.

6 0
3 years ago
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the nec
Masteriza [31]

Given Information:

                                                  Per Unit  15,000 Units  Per Year Direct materials                                        $ 9         $135,000  

Direct labor                                           11              165,000  

Variable manufacturing overhead    2              30,000

Fixed manufacturing overhead, traceable  6*      90,000  

Fixed manufacturing overhead, allocated  13       195,000

Total cost                                                  $41                      $615,000

Solution:

Compute the total cost of making and buying the parts:

                                                    Make                           Buy

Cost of purchasing                        0                         525,000

                                                                               (15,000*35)

Direct materials                             135,000                     0

Direct Labour                                  165000                     0

Variable manufacturing overhead  30,000                    0

Fixed manufacturing overhead       57240                     0

                                                       -----------------------------------------------

Total Relevant cost                           387,240                  525,000

7 0
2 years ago
Other questions:
  • Many firms are finding that high-tech, computerized training has dual benefits. It develops employees who are more effective and
    6·1 answer
  • ECG Company recorded two sales on March 1 of $20,000 and $30,000 under credit terms of 3/10, n/30 (3% discount if paid within 10
    6·1 answer
  • Making periodic deliveries of products to each zara store is an example of
    11·2 answers
  • Phillips equipment has 75,000 bonds outstanding that are selling at par. bonds with similar characteristics are yielding 7.5 per
    11·1 answer
  • 10 percent increase in the price of soda leads to a 20 percent increase in the quantity of iced tea demanded. it appears that: _
    11·1 answer
  • The cost accountant for Angie’s Apparel has compiled the following information for last month's operations. Administrative costs
    5·1 answer
  • Of the last 100 customers entering a computer shop, 25 have purchased a computer. If the classical method for computing probabil
    5·1 answer
  • Why you believe it is important to align it with the organization's core goals and strategic direction?
    15·1 answer
  • Four ways by which your choice of reading material can affect your writing
    5·1 answer
  • Hunter owns an app development firm. Though the company started small, the business has grown substantially with more people and
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!