Table 3.1 in the previous chapter presents financial statements for R&E Supplies for the period 2018 through 2021, and Table 3.5 presents a pro forma financial forecast for 2022. Use the information in these tables to answer the following questions.

a. Calculate R&E’s sustainable growth rate in each year from 2019 through 2022.

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 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? LO.1