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Zarqa River Corporation, an electrical company, reported the following ratios for the years 2016 through 2019 as the following: Financial Ratios 2016 2017 2018 2019

Zarqa River Corporation, an electrical company, reported the following ratios for the years 2016 through 2019 as the following:

Financial Ratios

2016

2017

2018

2019

Profit Margin

12.3%

13.5%

15.5%

16.7%

Earnings Retention

91.9%

92.8%

92.2%

86.6%

Assets Turnover

1.14 Time

1.11 Time

1 Time

0.97 Time

Growth Rate in Sales

16.4%

21.4%

14%

8.5%

Sustainable Growth Rate

28.5%

30.5%

31.5%

26%

The Chief Executive Officer of the company is very concerned about the growth rates, so he asked you as the Financial Manager of the company to indicate if the company has a problem with the sustainable growth rates throughout the four years. If so, how the company coped with this problem.

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