EXERCISE 1

Information about ABC company:

Sales 400.000

Net Income 20.000

Dividend 5.000

Total Liabilities 50.000

Equity 150,000

1) Calculate internal growth rate

2) Calculate sustainable growth rate

gi=	roa*b
	1-roa*b

Total assets = total liabilities+total equity = 50,000+150,000 = 200,000

ROA = NET INCOME/ TOPLAM ASSETS = 20,000/200,000 = %10

b = R-E / net income = (net income-dividends)/net income = 15,000/20,000 = %75

gi = %10*%75/(1-%10*%75) = %8.1

gs=	roe*b
	1-roe*b

ROE = NET INCOME / EQUITY = 20,000 / 150,000 = %13.3

gs = %13.3*%75/(1-%13.3*%75) = %11.1