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
TEA [102]
3 years ago
5

A company has a retention rate of 50%, sales of $25,000, beginning equity of $50,000 and profit margins of 10%, an asset turnove

r ratio of .75 and debt of $10,000. What is its sustainable growth rate?
Business
1 answer:
Degger [83]3 years ago
5 0

Answer:

Sustainable Growth Rate: 2.5%

Explanation:

Sustainable growth rate is calculated by multiplying return on equity with retention ratio.

Logic behind above is that whatever portion of net profit is retained by the Company, is used in the Company's operations, which earns certain percentage of equity known as return on equity. By multiplying both return on equity with retention ratio, we assume that the practice will continue for foreseeable future and the Company will continue to grow at the calculated growth rate.

Growth rate = Retention ratio * return on equity

Retention ratio = 50%

Return on equity = Net profit available for distribution / Opening equity

Return on Equity = (25,000 * 10%) / 50,000

Return on Equity = 5%

Growth Rate = 5% * 50%

Growth Rate = 2.5%

You might be interested in
Employee involvement and participation (eip) management is a method of management where ________.
Grace [21]
It's a method where <span>subordinates share a significant degree of decision-making power with their immediate superiors
One positive benefit of the employee involvement and participation is that companies will prepare more employees to understand the company's operational method and make more potential leaders for the company if it choose to expand in the future</span>
6 0
3 years ago
Money is to an economy what language is to communication. What does this statement mean?
Tasya [4]

Answer:

What does economy of language mean?

Explanation:

The economics of language is an emerging field of study concerning a range of topics such as the effect of language skills on income and trade, and the costs and benefits of language planning options, preservation of minority languages, etc. Language can be an expression of symbolic power.

8 0
3 years ago
If a currency such as the​ US$ is traded in a competitive​ market, a(n)​ ________ in demand for the​ US$ ________ the price of t
Lerok [7]

Answer:

If a currency such as the​ US$ is traded in a competitive​ market, a(n)​ increase in demand for the​ US$ raises the price of the​ US$ in terms of another currency such as the Japanese Yen ​(yen​).

Explanation:

Basic offer and demand law.

5 0
3 years ago
Does unemployment affect demand?<br>​
Ivahew [28]

Yes it does. Unemployment is when a person isn't currently hired at a work pleace. If people are unemployed they are making no income so less people are in need of products so it lowers the demand.

6 0
3 years ago
Frankâ Pianki, the manager of an organic yogurt processing plant desires a quality specification with a mean of 18.0 âounces, an
aleksley [76]

Answer: 0.050

Explanation:

Mean = 18

USL = 18.6

LSL = 17.4

SD = 1.25

Cpk = Min{(mean - LSL / 3*sd), (USL - mean / 3*sd)}

= Min{ ( 18 - 17.4/ 3 * 1.25), (18.6 - 18 / 3 * 1.25)}

= Min { 0.05 0.05)

Cpk = 0.050

8 0
3 years ago
Other questions:
  • HELP!
    7·2 answers
  • Sheridan Company sells office equipment on July 31, 2017, for $20,320 cash. The office equipment originally cost $84,510 and as
    13·1 answer
  • The traditional view is that the optimum level of inspection is where the
    5·1 answer
  • The major disadvantage of a trust is
    10·2 answers
  • An MNC uses which international strategy for entering a foreign market by simply shipping goods produced in the company's home c
    10·1 answer
  • A collection of verbal and symbolic assertions that specify how and why variables are related, and the conditions under which th
    15·1 answer
  • you are going to deposit $19000 today. You will earn an annual rateof 3.3 percent for 11 years, and then earn an annual rate of
    14·1 answer
  • PLEASE HELP ME!!
    13·1 answer
  • The fact that the warehouses of a company's suppliers are located in close proximity to its factories is an example of having a
    9·1 answer
  • When responding to a message, what should a professional always do? Choose 2 answers.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!