Loreto Inc. has the following financial ratios: asset turnover = 1.40; profit margin = 5%; payout ratio

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Loreto Inc. has the following financial ratios: asset turnover = 1.40; profit margin = 5%; payout ratio = 25%; equity/assets = .60.

a. What is Loreto's sustainable growth rate?

b. What is its internal growth rate?

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.

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Fundamentals of Corporate Finance

ISBN: 978-1259722615

9th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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Question Posted: Jun 24, 2017 08:59 AM

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Loreto Inc. has the following financial ratios: asset turnover = 1.40; profit margin = 5%; payout ratio

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