Use the following financial statements for your activity. Amounts are in thousands except for EPS and DPS. For the years ended December 31 2003 2002 Sales revenue $3,074 $2,567 Less: Cost of goods sold 2,088 1,711 Gross profits $ 986 $ 856 Less: Operating expenses Selling expense $ 100 $ 108 General and administrative expenses 194 187 Lease expense 35 35 Depreciation expense 239 223 Total operating expense $ 568 $ 553 Operating profits $ 418 303 Less: Interest expense 93 91 Net profits before taxes $ 325 $ 212 Less: Taxes (rate = 29%)6 94 64 Net profits after taxes $ 231 $ 148 Less: Preferred stock dividends 10 10 Earnings available for common stockholders $ 221 $ 138 Earnings per share (EPS) $ 2.90 $ 1.81 Dividend per share (DPS)d $ 1.29 $ 0.75 "Lease expense is shown here as a separate item rather than being included as part of interest expense, as specified by the FASB for financial-reporting pur- poses. The approach used here is consistent with tax-reporting rather than financial-reporting procedures. The 29% tax rate for 2003 results because the firm has certain special tax write-offs that do not show up directly on its income statement. "Calculated by dividing the earnings available for common stockholders by the number of shares of common stock outstanding-76,262 in 2003 and 76,244 in 2002. Earnings per share in 2003: $221,000 + 76,262 = $2.90; in 2002: $138,000 + 76,244 = $1.81. *Calculated by dividing the dollar amount of dividends paid to common stock- holders by the number of shares of common stock outstanding. Dividends per share in 2003: $98,000 + 76,262 = $1.29; in 2002: $57,183 + 76,244 = $0.75. December 31 Assets 2003 2002 Current assets Cash $ 363 $ 288 Marketable securities 68 51 Accounts receivable 503 365 Inventories 289 300 Total current assets $1,223 $1,004 Gross fixed assets (at cost) Land and buildings $2,072 $1.903 Machinery and equipment 1,86 1.693 Furniture and fixtures 358 316 Vehicles 275 314 Other (includes financial leases) 98 96 Total gross fixed assets (at cost) $4.669 $4.322 Less: Accumulated depreciation 2,295 2,056 Net fixed assets $2,374 $2,26 Total assets $3,597 $3,270 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 382 $ 270 Notes payable 79 99 Accruals 159 114 Total current liabilities $ 620 $ 483 Long-term debt (includes financial leases)6 $1,023 $ 967 Total liabilities $1,643 $1,450 Stockholders' equity Preferred stock-cumulative 5%, $100 par, 2,000 shares authorized and issued $ 200 $ 200 Common stock-$2.50 par, 100,000 shares authorized, shares issued and outstanding in 2003: 76,262; in 2002: 76,244 191 190 Paid-in capital in excess of par on common stock 428 418 Retained earnings 1,135 1,012 Total stockholders' equity $1,954 $1,820 Total liabilities and stockholders' equity $3,597 $3,270 "In 2003, the firm has a 6-year financial lease requiring annual beginning-of-year payments of $35,000. Four years of the lease have yet to run. bAnnual principal repayments on a portion of the firm's total outstanding debt amount to $71,000. The annual preferred stock dividend would be $5 per share (5% X $100 par), or a total of $10,000 annually ($5 per share X 2,000 shares).INSTRUCTIONS: Based on the financial statements found on 9.3.1 Tab, satisfy what is being asked for. For retention rate and dividend payout ratio round off your answers to four (4) decimal places. For SGR, use the percentage form and include the percentage sign(%) plus, round off your final answers for SGR to two(2) decimal places - in percentage form. 1. 7. 8. What is the sustainable growth rate of the company for year 2003?_ What is the sustainable growth rate of the company for year 2002?_ What is the company's profit margin for year 2003?_ What is the company's asset turnover for year 2003?_ What is the retention rate of the company for 2003?_ What is the retention rate of the company for 2002?_ For 2003, assume that all other variables are held constant, what should be the company's profit margin for them to have a sustainable growth rate of 10%?_ For 2003, assume that all other variables are held constant, what should be the company's asset turnover for them to have a sustainable growth rate of 8%?_