Question

how I estimated the number of sales growth of rubber industry using external factors ? For example using government regulations how can I estimated to the number like 2 or 3 or 4 %

Answer 1

Growth is the multiplication of retention money of the profit with the earning on equity. It is the estimation that the company would earn in the future.

For the rubber industry also the estimation would be made on the basis of information provided in the reports issued internally and externally.

Some of the external factors used are: -

· Floating Cost: - If the cost is higher than there would be maximum retention of earnings while in reverse situation there will be payment of dividend.

· Consideration of Tax: - If the rate on capital gain is higher than the company would prefer of distribute dividends while if the tax on dividend is higher than the retention of earning would be encouraged.

· Legal Consideration: - There are different guidelines governing a particular organizations which should be followed. This is beyond the control of company and a mitigating plan should be prepared to overcome it.

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