Question

Richman Savings Association has forecast the following performance ratios for the year ahead. How fast can Richman allow its assets to grow without reducing its ratio of equity capital to total assets, assuming its performance holds reasonably steady over the period?

Profit margin of net income over operating revenue.... 16.00%
Asset utilization (operating revenue ÷ assets)..... 8.25%
Equity multiplier................ 10x
Net earnings retention ratio............ 60.00%



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  • CreatedOctober 31, 2014
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