Robert Half International, Inc. (RHI), headquartered in Menlo Park California, is the world's first and largest provider of temporary and permanent personnel in accounting, finance, and information tech- nology with 330 offices worldwide. The following are selected finan- cial data for the company for the period 2000-2004. 2000 2001 2002 2003 2004 Profit margin (%) 6.89 4.94 0.11 0.32 5.25 Retention ratio (%) 100.0 100.0 100.0 100.0 78.27 Asset turnover (X) 2.78 2.47 2.03 2.00 2.23 Financial leverage (X) 1.69 1.38 1.16 1.32 1.52 Growth rate in sales (%) 22.89 -10.05 -28.76 3.55 26.19

a. Calculate Robert Half's sustainable growth rate in each year.

b. Comparing the company's sustainable growth rate with its actual growth rate in sales, what growth problems did the company face over this period?

c. Considering economic conditions over the period, what appears a likely cause of these problems?

d. Robert Half paid its first dividends in 2004. As an analyst, assess the company's decision to pay dividends.

AppendixLO1