1.

Consider the following information for Company XY:

Profit margin	9.8%
Capital intensity ratio	0.58
Debtequity ratio	0.53
Net income	$34,000
Dividends	$21,760

Calculate the sustainable growth rate. Hint: Remember the Dupont identity and the fact that the TAT ratio is the inverse of the capital intensity ratio.

2.

Company TY is currently operating at only 89.00% of fixed asset capacity. Fixed assets are $395,000. Current sales are $500,000 and projected to grow to $623,596.

What are the full-capacity sales of the company?

What is the maximum sales growth of the company?