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Problem 4-7 Calculating Sustainable Growth [LO3] The most recent financial statements for Bello Co. are shown...

Problem 4-7 Calculating Sustainable Growth [LO3]

The most recent financial statements for Bello Co. are shown here:
Income Statement Balance Sheet
  Sales $ 20,000 Current assets $ 11,920 Debt $ 16,360
  Costs 13,700 Fixed assets 31,050 Equity 26,610
  Taxable income $ 6,300     Total $ 42,970     Total $ 42,970
  Taxes (22%) 1,386
    Net income $ 4,914

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.)

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jeff jeffy answered 3 months ago
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