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?
