Table 3-1 in the last chapter presents R&E Supplies' financial statements for the period 1996 through 1999, and Table 3-4 presents a pro forma financial forecast for 2000. Use the information in these tables to answer the following questions.

a. Calculate R&E Supplies' sustainable growth rate in each year from 1997 through 2000.

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

c. How does the company appear to have coped with these problems? Do you see any difficulties with the way it has addressed its growth problems over this period? If so, what are they?

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

AppendixLO1