Question
Using the financial data from Cape Karate Sporting Goods Ltd., answer the following questions regarding Cape Karates growth management challenges. CAPE KARATE SPORTING GOODS LTD
Using the financial data from Cape Karate Sporting Goods Ltd., answer the following questions regarding Cape Karates growth management challenges.
CAPE KARATE SPORTING GOODS LTD
| FINANCIAL DATA (Rand in thousands) | |||||
|
| 2017 | 2018 | 2019 | 2020 | 2021 |
| Sales | 475.00 | 715.00 | 810.00 | 905.00 | 1,100.00 |
| Net income | 40.50 | 25.75 | 35.50 | 47.50 | 27.50 |
| Total assets | 480.50 | 660.00 | 675.00 | 725.00 | 925.00 |
| Equity | 345.00 | 435.00 | 455.00 | 440.00 | 560.00 |
| Dividends | 0.00 | 0.00 | 0.85 | 1.65 | 2.30 |
Required:
a. Use the information below from Tournament Sporting Goodss annual financial statements to calculate the actual and sustainable growth rate for each year from 2018 to 2021. (8 marks)
b. Do you think Tournament Sporting Goods is having a problem financing its growth? Is the increase in dividends a good idea for the company? (2 marks)
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