2. Table 3.1 in the last chapter presents R&E Supplies' financial state- ments for the period 2002...

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2. Table 3.1 in the last chapter presents R&E Supplies' financial state- ments for the period 2002 through 2005, and Table 3.5 presents a pro forma financial forecast for 2006. Use the information in these tables to answer the following questions.

a. Calculate R&E Supplies' sustainable growth rate in each year from 2003 through 2006.

b. Comparing the company's sustainable growth rate with its actual and projected growth rates in sales over these years, what growth management problems does R&E Supplies appear to face in this period?

c. How did the company cope with these problems? Do you see any difficulties with the way it addressed its growth problems over this period? If so, what are they?

d. What advice would you offer management regarding managing future growth?

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