The most recent financial statements for Mandy Company are shown here: Income Statement Sales Costs Taxable income Taxes (21%) Net Income $19,000 12,880 Sustainable growth rate $ 6,120 1,285 $4,835 Current assets Fixed assets Total 4 Balance Sheet $ 11,720 Debt 26,550 Equity % $ 38,270 $15,760 22,510 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 35 ercent 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.) Total $38,270

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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.