A B C D E F G H I J K L M N O 4 Chapter 4 Problem 10 a. Use the information below from Tournment Sporting Goods's annual financial statements to calculate the actual and sustainable growth rate for each year from 5 2010 - 2014. 6 6. Do you think Tournment Sporting Goods is having a problem financing its growth? 7 Is the increase in dividends a good idea for the company? Each cell shaded The area shaded is valued at 2 points. is valued at 4 points. 12 Sales 13 Net income 14 Total assets 15 Equity 16 Dividends Tournment Sporting Goods (S in thousands) 2009 2010 2011 2012 2013 477.84 491.62 706.52 792.01 876.52 43.27 26.31 38.48 44.84 477.06 648.42 664.26 697.16 346.32 426.01 465.85 432.91 0.80 1.65 2014 1,088.46 25.76 982.63 553.27 2.22 17 2011 2012 2013 2014 18 a. Sustainable growth calculation: 19 2010 20 Profit margin 8.80% 21 Retention ratio 1.00 22 Asset turnover 1.03 23 Financial leverage N/A 24 Sustainable growth (g*) NA 25 Actual growth 2.88% 26 g* -g N/A 28 Part (b): Keep your response within the shaded area. A B C D E F G H I J K L M N O 4 Chapter 4 Problem 10 a. Use the information below from Tournment Sporting Goods's annual financial statements to calculate the actual and sustainable growth rate for each year from 5 2010 - 2014. 6 6. Do you think Tournment Sporting Goods is having a problem financing its growth? 7 Is the increase in dividends a good idea for the company? Each cell shaded The area shaded is valued at 2 points. is valued at 4 points. 12 Sales 13 Net income 14 Total assets 15 Equity 16 Dividends Tournment Sporting Goods (S in thousands) 2009 2010 2011 2012 2013 477.84 491.62 706.52 792.01 876.52 43.27 26.31 38.48 44.84 477.06 648.42 664.26 697.16 346.32 426.01 465.85 432.91 0.80 1.65 2014 1,088.46 25.76 982.63 553.27 2.22 17 2011 2012 2013 2014 18 a. Sustainable growth calculation: 19 2010 20 Profit margin 8.80% 21 Retention ratio 1.00 22 Asset turnover 1.03 23 Financial leverage N/A 24 Sustainable growth (g*) NA 25 Actual growth 2.88% 26 g* -g N/A 28 Part (b): Keep your response within the shaded area