Beginning Equity $100,000,000 New Equity $10,000,000 Net Profit i Sales Ratio .05 Sales in Previous Year $300,000,000 Debt/Equity Ratio 50% Dividend $4,000,000 Growth in Sales 25% Calculate the total assets to sales ratio at a growth rate of 25% (. StGrowth Re( ) Profit Rate (1 + Sust Growth Ra ) ( ) New (1 Equity 4 + .Div) Profit Margin (+ Growth Rate If a sales growth rate of 25% is again desired but a sales-to-total assets ratio of 1.70 is all that is likely (total assets-to-sales ratio of .5883) what is the debt-to-equity ratio consistent with this. + StGrowth Rate 5 New Profit Finally, suppose that the company wishes to grow at 20% in sales, raise no new equity capital and had other target variables of SIA 1.90, D/Eq .60 and dividends of 4,000,000 determine the net profit margin it would need to achieve in order to make this happen (Ey +New Equity - Div ) Profit Debe - ) ( 1 + Growth Rate Equity Assets