Question
An analyst following Manhattan Corp. wants to estimate the sustainable growth rate for the company by using the PRAT model. For this purpose, the analyst
An analyst following Manhattan Corp. wants to estimate the sustainable growth rate for the company by using the PRAT model. For this purpose, the analyst has compiled the data in the following table.
Assets and equity values are for the end of the year; the analyst uses averages of beginning and ending balance sheet values in computing ratios based on total assets and shareholders equity. For example average total assets for 2019 would be computed as (149,158 + 133,035)/2. Note: All numbers except for EPS and DPS are in $ millions.
Item | 2019 | 2018 | 2017 | 2016 |
Net income | 18,832 | 17,731 | 14,695 | 13,508 |
Sales | 298,219 | 226,950 | 198,129 | 164,266 |
Total assets | 149,158 | 133,035 | 127,745 | 99,968 |
Shareholders' equity | 95,687 | 72,491 | 62,663 | 49,947 |
EPS | 9.08 | 7.49 | 6.16 | 6.3 |
DPS | 2.75 | 2.03 | 1.65 | 1.69 |
Your task is to compute the sustainable growth rate for 2019.
Write your answer in percentage form, and round your answer to 4 decimal places. For example, write 7.4615 instead of 0.0075.
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