Question No # 1

INSTRUCTIONS: Calculate the sustainable growth rate based on your calculations of return on equity (ROE) and assuming a 60 percent dividend-payout ratio. How can a company increase its sustainable growth rate?

ROE = 7.3 %

Analysis

Question No # 2

"INSTRUCTIONS: Evaluate the firm's overall financial condition and performance based on your analysis and then address these questions:

1. Is the company improving or deteriorating over this three-year period?

2. How does your ratio analysis justify your interpretation?

LIQUIDITY RATIOS		2013	2014	2015	Industry Average
Current Ratio		1.5	1.7	1.7	1.6
Quick Ratio		0.9	1	1.0	0.9
Operating Cash Flow		n/a	n/a
ASSET MANAGEMENT RATIOS		2013	2014	2015	Industry Average
Inventory Turnover		6	5	4.5	8.4
Average Collection Period		40	50		40
Fixed Asset Turnover		n/a	n/a	3.16
Total Asset Turnover		1.5	1.5	1.34	1.75
DEBT MANAGEMENT RATIOS		2013	2014	2015	Industry Average
Debt Ratio		60%	56%	53%	50%
Times Interest Earned		2.5	3.5	5.5%	4
PROFITABILITY RATIOS		2013	2014	2015	Industry Average
Gross Profit Margin		20%	19.70%	18.9%	20%
Operating Profit Margin		4.70%	4.80%	5.1%	6%
Net Profit Margin		2%	2.30%	2.5%	3%
Return on Investment		3.00%	3.50%	3.4%	5.25%
Return on Equity		7.50%	7.95%	7.3%	10.50%