Unit 4 Assignment: Sustainable Growth Rate Due Date: Sunday of Unit 4 Total Points: 100 Instructions: You have been the Operations Manager for your company for the last five years and are preparing to ask for a large raise. You have just learned from a managerial finance seminar that: Sustainable Growth Rate = %Profit Margin X % Retention Ratio X Asset Turnover X Financial Leverage. You ask your CFO for the following data: 2012 %Profit Margin 6.00 % Retention Ratio 99.50 Asset Turnover 1.33 Financial leverage 1.61 %Growth rate in sales 46.80 2013 7.00 100.00 2.02 1.69 84.60 2014 4.60 100.00 1.92 1.57 13.10 2015 5.20 100.00 2.07 1.57 25.90 2016 7.20 100.00 2.64 1.64 57.10 Based on the information above, answer the following questions: 1. Calculate the annual sustainable growth rate for each of the above years. 2. Compare the sustainable growth rate with actual growth rate in sales, what growth problems did management face over this period? 3. Explain how this data justifies a large raise for the Operations Manager. what growth problems did management face over this period? 3. Present the results of your calculations for #1 and #2 and the analysis behind it to the CEO. 4. Explain how this data justifies a large raise for the Operations Manager. Requirements: There is no specific page length requirement; however, all questions posed must be addressed completely. All sources used must be properly cited in APA format. Be sure to read the criteria, by which your assignment will be evaluated, before you write, and again after you write. Evaluation Rubric for Sustainable Growth Rate Assignment CRITERIA Exemplary (14 - 15 Points) Overview of the The overview is Sustainable Growth clearly presented, Rate including all kev Proficient (10 - 13 Points) The overview is presented, though kev details may not Deficient (0 - 9 Points) Does not provide the overview, or the overview is missing CRITERIA Exemplary Proficient Deficient (14-15 Points) (10 - 13 Points) (0 - 9 Points) Overview of the The overview is The overview is Does not provide the Sustainable Growth clearly presented, presented, though overview, or the Rate including all key key details may not overview is missing details. be clearly or key details. completely presented (23 - 25 Points) (16-22 Points) (0 - 15 Points) Calculation of the The calculations for The calculations for Does not provide the Annual Sustainable year are clearly year are presented, calculations for year Growth for Each presented, including though key details or is missing key Year all key details. may not be clearly or details. completely presented. Comparison of the The comparison and The comparison and Does not provide the Sustainable Growth evaluation are clearly evaluation are comparison and Rate with the Actual presented, including presented, though evaluation or is Growth Rate and all key details. key details may not missing key details. Evaluation of be clearly or Growth Problems completely presented Justification for The justification is The justification is Does not provide the Large Raise for the clearly presented, presented, though justification, or the Operations including all key key details may not evaluation is missing Manager details. be clearly or key details. completely presented. (9-10 Points) (7-8 Points) (0 - 6 Points) Clear and Writing and format are few errors that do Errors impede Professional clear, professional, not impede professional Writing and APA APA compliant, and professional presentation; Format error-free. presentation. guidelines not followed. Unit 4 Assignment: Sustainable Growth Rate Due Date: Sunday of Unit 4 Total Points: 100 Instructions: You have been the Operations Manager for your company for the last five years and are preparing to ask for a large raise. You have just learned from a managerial finance seminar that: Sustainable Growth Rate = %Profit Margin X % Retention Ratio X Asset Turnover X Financial Leverage. You ask your CFO for the following data: 2012 %Profit Margin 6.00 % Retention Ratio 99.50 Asset Turnover 1.33 Financial leverage 1.61 %Growth rate in sales 46.80 2013 7.00 100.00 2.02 1.69 84.60 2014 4.60 100.00 1.92 1.57 13.10 2015 5.20 100.00 2.07 1.57 25.90 2016 7.20 100.00 2.64 1.64 57.10 Based on the information above, answer the following questions: 1. Calculate the annual sustainable growth rate for each of the above years. 2. Compare the sustainable growth rate with actual growth rate in sales, what growth problems did management face over this period? 3. Explain how this data justifies a large raise for the Operations Manager. what growth problems did management face over this period? 3. Present the results of your calculations for #1 and #2 and the analysis behind it to the CEO. 4. Explain how this data justifies a large raise for the Operations Manager. Requirements: There is no specific page length requirement; however, all questions posed must be addressed completely. All sources used must be properly cited in APA format. Be sure to read the criteria, by which your assignment will be evaluated, before you write, and again after you write. Evaluation Rubric for Sustainable Growth Rate Assignment CRITERIA Exemplary (14 - 15 Points) Overview of the The overview is Sustainable Growth clearly presented, Rate including all kev Proficient (10 - 13 Points) The overview is presented, though kev details may not Deficient (0 - 9 Points) Does not provide the overview, or the overview is missing CRITERIA Exemplary Proficient Deficient (14-15 Points) (10 - 13 Points) (0 - 9 Points) Overview of the The overview is The overview is Does not provide the Sustainable Growth clearly presented, presented, though overview, or the Rate including all key key details may not overview is missing details. be clearly or key details. completely presented (23 - 25 Points) (16-22 Points) (0 - 15 Points) Calculation of the The calculations for The calculations for Does not provide the Annual Sustainable year are clearly year are presented, calculations for year Growth for Each presented, including though key details or is missing key Year all key details. may not be clearly or details. completely presented. Comparison of the The comparison and The comparison and Does not provide the Sustainable Growth evaluation are clearly evaluation are comparison and Rate with the Actual presented, including presented, though evaluation or is Growth Rate and all key details. key details may not missing key details. Evaluation of be clearly or Growth Problems completely presented Justification for The justification is The justification is Does not provide the Large Raise for the clearly presented, presented, though justification, or the Operations including all key key details may not evaluation is missing Manager details. be clearly or key details. completely presented. (9-10 Points) (7-8 Points) (0 - 6 Points) Clear and Writing and format are few errors that do Errors impede Professional clear, professional, not impede professional Writing and APA APA compliant, and professional presentation; Format error-free. presentation. guidelines not followed