**** Balance sheet was uploaded in two parts.*****

1. Looking at the prior four fiscal years, Calculate the sustainable growth rate and actual growth rate in each year. 2. Compare the company's sustainable growth rate with its actual growth rate in sales. What growth problems does the company face? 3. If financing is needed, should they use debt or equity financing? Please defend your selection with pros and cons of each. If financing is not needed, how should the company financial management dispose of the excess cash?

Get Quarterly Data Annual Income Statement (values in 000's) Period Ending: Total Revenue Cost of Revenue Trend 531/2018 531/2017 531/2016 5/31/2015 II $36,397,000 34,350,000 $32,376,000 $30,601,000 II $20,441000 $19,038,000 $17,405,000 $16,534,000 II $15,956,000 $15.312,000 S14,971,000 $14,067,000 Gross Profit Operating Expenses Research and Development Sales, General and Admin Non-Recurring Items Other Operating Items Operating Income Add'i incomelexpense items Earnings Betore interest and Tax Interest Expense Earnings Before Tax Income Ta:x Minority Interest Equity Earnings/Loss Unconsolidated 50 S0 50 S0 50 S0 50 50 S0 SO S0 S0 II $4,445,000 S4,749,000 4,502,000 $4,175,000 (S66,000) $196,000 $140,000 $58,000 $4,325,000 $4 886,000 $4,623,000 4,205,000 $0 $4,325,000 $4 886,000 $4,623,000 4,205,000 $2,392,000 646,000 $863,000 $932,000 S0 $0 S0 S0 S0 50 50 S0 S0 S0 S0 Subsidiary Net Income-Cont. Operations Net Income Net Income Applicable to Common$1,933,000 $4,240,000 3,760,000 $3,273,000 $1,933000 $4240,000 3,760,000 $3,273,000 II $1,933,000 $4,240,000 3,760,000 3,273,000 Sharehoiders Annual Income Statement (values in 000's) Period Ending Current Assets Cash and Cash Equivalents Short-Term Investments Get Quarterly Data Trendsq1/2018 31/2017 312016 312015 $4.249,000 3,808,000 $3,138,000 $3,852.000 I988,000 ,371,000 $2.319,000 $2.072,000 I $3.498,000 3,77,000 3,241,000 53,358,000 III $5,261,000 5,055,000 4,838,000 $4.337,000 $1,130,000 1,150,000 $1,489,00D $1,988,000 II $15,134,000 $16,061,000 $15,025,000 $15,587,000 Net Receivables Inventory Other Current Assets Total Current Assets Long-Term Assets Long-Term Investments Fixed Assets 50 50 50 50 $4454,000 3,989,000 $3,520,000 3,011000 Goodwill I$154,000 3,000 $131,000 $131,000 intangible Assets Other Assets Deferred Asset Charges Total Assets $285,000 $283,000 $281,000 $281,000 50 50 50 50 1111 $2,509,000 $2.787,000 $2.422,000 $2.587,000 III $22,536,000 $23,259.000 $21,379.000 $21,597,000 Current Liabilities Accounts Payable 55,698,000 $5,143,000 $5,313,000 ,151,000 Short Term Debt/ Current Portion of342.000$331000$45,000 $181.000 5342,000 $331,000 $45,000 Long-Term Debt Other Current Liabilities Total Current Liabilities Long-Term Debt Other Liabilities 50 50 II$6,040,000 $5,474,000 $5,358,000 $6,332,000 $3,488,000 347,000 $1,993,000 ,079,000 50 50 Deferred Liability Charges Misc. Stocks Minority Interest Total Liabilities Stock Holders Equity Common Stocks Capital Surplus Retained Earnings Treasury Stock Other Equity Total Equity Total Liabilities & Equity $3,216,000 $107,000 $1,770,000 $1.479,000 50 50 50 50 $12.724,000 $10,852.000 9.121,000 $8.890,000 $3,000 $8,384,000 5,710,000 78,000 $8,773,000 3,517,000 07000 4,151,000 $4,885,000 53,000 53,000 53,000 50 50 (582,000) ($213,000) $318,000 51,246,000 $9,812,000 $12.407,000 $12,258,000 $12,707,000 II$22,536,000 $23,259.000 $21.,379,000 $21.597.000 Get Quarterly Data Annual Income Statement (values in 000's) Period Ending: Total Revenue Cost of Revenue Trend 531/2018 531/2017 531/2016 5/31/2015 II $36,397,000 34,350,000 $32,376,000 $30,601,000 II $20,441000 $19,038,000 $17,405,000 $16,534,000 II $15,956,000 $15.312,000 S14,971,000 $14,067,000 Gross Profit Operating Expenses Research and Development Sales, General and Admin Non-Recurring Items Other Operating Items Operating Income Add'i incomelexpense items Earnings Betore interest and Tax Interest Expense Earnings Before Tax Income Ta:x Minority Interest Equity Earnings/Loss Unconsolidated 50 S0 50 S0 50 S0 50 50 S0 SO S0 S0 II $4,445,000 S4,749,000 4,502,000 $4,175,000 (S66,000) $196,000 $140,000 $58,000 $4,325,000 $4 886,000 $4,623,000 4,205,000 $0 $4,325,000 $4 886,000 $4,623,000 4,205,000 $2,392,000 646,000 $863,000 $932,000 S0 $0 S0 S0 S0 50 50 S0 S0 S0 S0 Subsidiary Net Income-Cont. Operations Net Income Net Income Applicable to Common$1,933,000 $4,240,000 3,760,000 $3,273,000 $1,933000 $4240,000 3,760,000 $3,273,000 II $1,933,000 $4,240,000 3,760,000 3,273,000 Sharehoiders Annual Income Statement (values in 000's) Period Ending Current Assets Cash and Cash Equivalents Short-Term Investments Get Quarterly Data Trendsq1/2018 31/2017 312016 312015 $4.249,000 3,808,000 $3,138,000 $3,852.000 I988,000 ,371,000 $2.319,000 $2.072,000 I $3.498,000 3,77,000 3,241,000 53,358,000 III $5,261,000 5,055,000 4,838,000 $4.337,000 $1,130,000 1,150,000 $1,489,00D $1,988,000 II $15,134,000 $16,061,000 $15,025,000 $15,587,000 Net Receivables Inventory Other Current Assets Total Current Assets Long-Term Assets Long-Term Investments Fixed Assets 50 50 50 50 $4454,000 3,989,000 $3,520,000 3,011000 Goodwill I$154,000 3,000 $131,000 $131,000 intangible Assets Other Assets Deferred Asset Charges Total Assets $285,000 $283,000 $281,000 $281,000 50 50 50 50 1111 $2,509,000 $2.787,000 $2.422,000 $2.587,000 III $22,536,000 $23,259.000 $21,379.000 $21,597,000 Current Liabilities Accounts Payable 55,698,000 $5,143,000 $5,313,000 ,151,000 Short Term Debt/ Current Portion of342.000$331000$45,000 $181.000 5342,000 $331,000 $45,000 Long-Term Debt Other Current Liabilities Total Current Liabilities Long-Term Debt Other Liabilities 50 50 II$6,040,000 $5,474,000 $5,358,000 $6,332,000 $3,488,000 347,000 $1,993,000 ,079,000 50 50 Deferred Liability Charges Misc. Stocks Minority Interest Total Liabilities Stock Holders Equity Common Stocks Capital Surplus Retained Earnings Treasury Stock Other Equity Total Equity Total Liabilities & Equity $3,216,000 $107,000 $1,770,000 $1.479,000 50 50 50 50 $12.724,000 $10,852.000 9.121,000 $8.890,000 $3,000 $8,384,000 5,710,000 78,000 $8,773,000 3,517,000 07000 4,151,000 $4,885,000 53,000 53,000 53,000 50 50 (582,000) ($213,000) $318,000 51,246,000 $9,812,000 $12.407,000 $12,258,000 $12,707,000 II$22,536,000 $23,259.000 $21.,379,000 $21.597.000