Review the abbreviated financial statements for the last two years for the Norne Energy Corp. All values are expressed in billions of dollars.

a. What was Norne€™s sustainable growth rate at the end of 2011?
b. How rapidly did Norne actually grow in 2012?
c. What changes in Norne€™s financial condition from 2011 to 2012 can you trace to the difference between the actual and sustainable growth rates?

Transcribed Image Text:

Norne Energy Corp Balance Sheet Current assets Fixed assets Total assets Current liabilities Long-tem debt Shareholders equity Total liabilities and equity 2012 S2.7 3.5 S6.2 $1.9 2.1 2.2 S6.2 2011 S2.5 3.4 $5.9 $1.8 2.2 1.9 S59 Norne Energy Corp Income Statement Sales Net income Dividends 2012 S7.5 0.5 0.2 2011 $7.1 0.4