Loreto Inc. has the following financial ratios: asset turnover = 1.40; net profit margin (il.e., net income/sales) = 5%: payout ratio = 25%; equity/assets = 0.60. a. What is Loreto's sustainable growth rate? b. What is its internal growth rate? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) a. Sustainable growth rate b. Internal growth rate

ENGR.ECONOMIC ANALYSIS
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Sustainable growth rate is NOT 9.59 or 8.75%
Internal growth rate is NOT 5.75 or 5.25%

 

Loreto Inc. has the following financial ratios: asset turnover = 1.40; net profit margin (i.e., net income/sales) = 5%: payout ratio = 25%,
equity/assets = 0.6o.
a. What is Loreto's sustainable growth rate?
b. What is its internal growth rate?
(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
a.
Sustainable growth rate
b.
Internal growth rate
Transcribed Image Text:Loreto Inc. has the following financial ratios: asset turnover = 1.40; net profit margin (i.e., net income/sales) = 5%: payout ratio = 25%, equity/assets = 0.6o. a. What is Loreto's sustainable growth rate? b. What is its internal growth rate? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) a. Sustainable growth rate b. Internal growth rate
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