Question
Vegetable Company has the following results: Net sales sh6,000,000 Net total assets sh4,000,000 Depreciation sh160,000 Net income sh400,000 Long-term debt sh2,000,000 Equity sh1,160,000 Dividends sh160,000
Vegetable Company has the following results:
Net sales sh6,000,000
Net total assets sh4,000,000
Depreciation sh160,000
Net income sh400,000
Long-term debt sh2,000,000
Equity sh1,160,000
Dividends sh160,000
Required:
a. Compute the Companys ROE directly.
My courses Financial Analysis and Forecasting General DFI 356: FINANCIAL ANALYSIS AND FORECASTING MODULE 1 EXAM Question 28 Not yet answered Marked out of 3.00 Not flaggedFlag question Question text A Vegetable Company has the following results:
Net sales sh6,000,000
Net total assets sh4,000,000
Depreciation sh160,000
Net income sh400,000
Long-term debt sh2,000,000
Equity sh1,160,000
Dividends sh160,000
Required:
a. Compute the Companys ROE directly.
%
b. Using the ROE computed in Part (a) above, what is the expected sustainable growth rate for the Company?
% c. Assuming the firms net profit margin went to 0.04, what would happen to the Companys ROE? hi %
d. Using the ROE in Part c, what is the expected sustainable growth rate?
%
e. Using the ROE in Part c, what is the expected sustainable growth rate if dividends were only sh40,000?
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Audit Planning A Risk Based Approach
Authors: K. H. Spencer Pickett
1st Edition
047169052X, 978-0471690528
