1. Friedmans Inc. is the third largest jewelry chain store in the US with 645 stores nationwide. Use the information below from Friedmans annual financial statement to calculate the actual and sustainable growth rate for each year.

2. Do you think Friedmans Inc. is having problem financing its growth? Is the increase in dividends a good idea for Friedmans?

FRIEDMANS INC. ($ In Millions)
		1996	1997	1998	1999	2000	2001
Sales		$ 192	$ 237	$ 287	$ 339	411.78	446.84
Net Income		$ -	$ 19	$ 11	$ 16	19.7	12.23
Total Assets			$ 223	$ 269	$ 275	318.43	451.32
Equity		$ 147	$ 172	$ 181	$ 192	211.03	222.57
Dividends		$ -	$ -	$ -	$ 0	0.79	0.94