1. Calculate both SGR and IGR for both of your assigned companies (local and international). Then...
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1. Calculate both SGR and IGR for both of your assigned companies (local and international). Then create a proforma income statement and Balance sheet for your local company only - by growing the company sales using the respective SGR only. Comment on the following issues: • Will retain earnings be enough for the desired growth? If not, then consider a loan. • If the loan taken, then check whether the loan will be sustainable or not Can the company achieve the growth without taking a loan by changing dividend policy? Keep the following points in mind in calculation: Use FY 2020 info as current year (31/12/20) Increase depreciation Interest expense will not change The current D/E is optimum All assets will grow Among liabilities, only accounts payable will grow (if they have any) Equity will not change Source of Data: Use investing.com> search your company> Financials 1. Calculate both SGR and IGR for both of your assigned companies (local and international). Then create a proforma income statement and Balance sheet for your local company only - by growing the company sales using the respective SGR only. Comment on the following issues: • Will retain earnings be enough for the desired growth? If not, then consider a loan. • If the loan taken, then check whether the loan will be sustainable or not Can the company achieve the growth without taking a loan by changing dividend policy? Keep the following points in mind in calculation: Use FY 2020 info as current year (31/12/20) Increase depreciation Interest expense will not change The current D/E is optimum All assets will grow Among liabilities, only accounts payable will grow (if they have any) Equity will not change Source of Data: Use investing.com> search your company> Financials
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Answer rating: 100% (QA)
The internal growth rate which was briefly addressed earlier represents the highest sales growth rat... View the full answer
Related Book For
College Accounting
ISBN: 978-1111528126
11th edition
Authors: Tracie Nobles, Cathy Scott, Douglas McQuaig, Patricia Bille
Posted Date:
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