| Calculate the international growth rate & sustainable growth rate?
S&S Air INC.
2006 income statement
$
sales: 21,785,300
cost of goods sold: 15,874,700
other expenses 2,762,500
deprection: 976,200
EBIT: 2,171,900
interest: 341,600
taxable income: 1,830,300
taxes(40%) 732,120
net income: 1,098,180
dividends $439,272
add to retained earning 658,908
S&S Air INC.
2006 balance sheet
current assets:
cash 315,000
accounts receivable 506,000
inventory 740,800
total current assets 1,561,800
fixed assets:
net plant & equipment 11,516,000
total assets 13,077,800
currentliability:
accounts payable 635,000
notes payable 1,450,000
total current liabilities 2,085,000
long term debt 3,800,000
shareholder equity:
common stock 250,000
retained earnings 6,942,800
total equity 7,192,800
total liabilities & equity 13,077,800
Q1: Calculate the international growth rate & sustainable growth rate? What do these numbers mean?
Q2: S&S Air is planning for a growth rate of 12 percent next year. Calculare the EFN for the company assuming the company is operating at full capacity. Can the company's sales increase at this growth rate?
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