The most recent financial statements for Shinoda Manufacturing Co. are shown below. Balance Sheet Income Statement Sales Costs Taxable income Tax (35%) $64,200 Current assets 44,680 $19,520 6,832 Fixed assets Total $ 28,000 Debt 80,900 Equity $108,900 Total $ 44,200 64,700 $ 108,900 Net Income $ 12,688 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 43 percent dividend payout ratio. No external equity financing is possible. 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.) Sustainable growth rate

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
The most recent financial statements for Shinoda Manufacturing Co. are shown below.
Income Statement
Sales
Balance Sheet
Costs
$ 64,200
44,680
Current assets
Fixed assets
Taxable income
Tax (35%)
$19,520
6,832
Total
$ 28,000 Debt
80,900 Equity
$108,900 Total
$ 44,200
64,700
$108,900
Net Income
$ 12,688
ok
ht
Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 43 percent dividend payout
ratio. No external equity financing is possible.
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.)
Sustainable growth rate
1%
Transcribed Image Text:The most recent financial statements for Shinoda Manufacturing Co. are shown below. Income Statement Sales Balance Sheet Costs $ 64,200 44,680 Current assets Fixed assets Taxable income Tax (35%) $19,520 6,832 Total $ 28,000 Debt 80,900 Equity $108,900 Total $ 44,200 64,700 $108,900 Net Income $ 12,688 ok ht Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 43 percent dividend payout ratio. No external equity financing is possible. 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.) Sustainable growth rate 1%
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education