Using the financial data from Cape Karate Sporting Goods Ltd., answer the following questions regarding Cape Karates
Question:
Using the financial data from Cape Karate Sporting Goods Ltd., answer the following questions regarding Cape Karate’s 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 Goods’s 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)
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078025778
17th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello