Question
Use the data below to solve for the sustainable growth rates for 2011 to 2015. 2011 2012 2013 2014 2015 Profit Margin 17 17 79.3
Use the data below to solve for the sustainable growth rates for 2011 to 2015.
| 2011 | 2012 | 2013 | 2014 | 2015 | |
| Profit Margin | 17 | 17 | 79.3 | 22.8 | 23.6 |
| Retention Ratio | 1 | 1 | 1 | 1 | 1 |
| Asset Turnover | 0.38 | 0.49 | 0.55 | 0.63 | 0.62 |
| Financial Leverage | 1.64 | 1.44 | 1.79 | 1.99 | 2 |
| Sustainable Growth Rate | |||||
| Actual Growth Rate | 26.1 | 40.1 | 43.5 | 40 | 26.3 |
What is the sustainable growth rate for each year? Based on your analysis of the sustainable growth rate between 2011 and 2015, what are your recommendations for the firm?
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Capital Markets Institutions Instruments And Risk Management
Authors: Frank J. Fabozzi
5th Edition
0262029480, 9780262029483
