The financial statements for Horizon Technologies for the year 2025 show that year-end Total Assets of $3,150 include Plant, Property, & Equipment (PP&E) of $2,650. The assets are financed by a Debt of $950 and Stockholders' Equity of $2,200. Annual Sales = $14,500 = • • Total Costs $14,000 • Net Income = $500 • Dividends = $275 • New Retained Earnings = $225 For 2026, the Asset Turnover Ratio (Sales/Total Assets), Net Profit Margin (Net Income/Sales), Payout Ratio (Dividends/Net Income), and Price-to-Earnings Ratio (currently 24.3) will remain constant. The company has 110 shares outstanding and seeks maximum growth by relying exclusively on retained earnings with zero external financing. What is the sales growth rate?
The financial statements for Horizon Technologies for the year 2025 show that year-end Total Assets of $3,150 include Plant, Property, & Equipment (PP&E) of $2,650. The assets are financed by a Debt of $950 and Stockholders' Equity of $2,200. Annual Sales = $14,500 = • • Total Costs $14,000 • Net Income = $500 • Dividends = $275 • New Retained Earnings = $225 For 2026, the Asset Turnover Ratio (Sales/Total Assets), Net Profit Margin (Net Income/Sales), Payout Ratio (Dividends/Net Income), and Price-to-Earnings Ratio (currently 24.3) will remain constant. The company has 110 shares outstanding and seeks maximum growth by relying exclusively on retained earnings with zero external financing. What is the sales growth rate?
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 19P
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What is the sales growth rate of this financial accounting question?
Transcribed Image Text:The financial statements for Horizon Technologies for the year 2025 show that
year-end Total Assets of $3,150 include Plant, Property, & Equipment (PP&E)
of $2,650. The assets are financed by a Debt of $950 and Stockholders' Equity
of $2,200.
Annual Sales = $14,500
=
•
•
Total Costs $14,000
•
Net Income = $500
•
Dividends = $275
•
New Retained Earnings = $225
For 2026, the Asset Turnover Ratio (Sales/Total Assets), Net Profit Margin (Net
Income/Sales), Payout Ratio (Dividends/Net Income), and Price-to-Earnings
Ratio (currently 24.3) will remain constant.
The company has 110 shares outstanding and seeks maximum growth by
relying exclusively on retained earnings with zero external financing.
What is the sales growth rate?
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