The most recent financial statements for Mandy Company are shown here: Income Statement Balance Sheet $ 11,780 Debt 27,900 Equity Sales Costs Taxable income Taxes (21%) Net income $19,300 13,200 Sustainable growth rate $ 6,100 1,281 $ 4,819 Current assets Fixed assets Total $ 39,680 % Total $ 15,940 23,740 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 45 percent dividend payout ratio. What is 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.) $39,680
The most recent financial statements for Mandy Company are shown here: Income Statement Balance Sheet $ 11,780 Debt 27,900 Equity Sales Costs Taxable income Taxes (21%) Net income $19,300 13,200 Sustainable growth rate $ 6,100 1,281 $ 4,819 Current assets Fixed assets Total $ 39,680 % Total $ 15,940 23,740 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 45 percent dividend payout ratio. What is 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.) $39,680
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.1E
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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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