L1 Chapter 4 Problem 10 a. Use the information below from Tournment Sporting Goods's annual financial statements to calculate the actual and sustainable growth rate for $ each year from 2010 - 2014. b. Do you think Tournment Sporting Goods is having a problem financing its growth? Is the increase in dividends a good idea for the company? Sales Net income Total assets Equity Dividends Tournment Sporting Goods ($ in thousands) 2009 2010 2011 2012 2013 477.84 491.62 706.52 792.01 876.52 43.27 26.31 38.48 44.84 477.06 648.42 664.26 697.16 346.32 426.01 465.85 432.91 0.80 1.65 2014 1,088.46 25.76 982.63 553.27 2.22 2011' 2012 2013 2014 + a. Sustainable growth calculation: ' 2010 Profit margin 8.80% 21 Retention ratio 1.00 Asset turnover 1.03 23 Financial leverage N/A 24 Sustainable growth (g*) NA 25 Actual growth 2.88% NA 28 Part (b): Keep your response zithin the shaded area. Problem 10 L1 Chapter 4 Problem 10 a. Use the information below from Tournment Sporting Goods's annual financial statements to calculate the actual and sustainable growth rate for $ each year from 2010 - 2014. b. Do you think Tournment Sporting Goods is having a problem financing its growth? Is the increase in dividends a good idea for the company? Sales Net income Total assets Equity Dividends Tournment Sporting Goods ($ in thousands) 2009 2010 2011 2012 2013 477.84 491.62 706.52 792.01 876.52 43.27 26.31 38.48 44.84 477.06 648.42 664.26 697.16 346.32 426.01 465.85 432.91 0.80 1.65 2014 1,088.46 25.76 982.63 553.27 2.22 2011' 2012 2013 2014 + a. Sustainable growth calculation: ' 2010 Profit margin 8.80% 21 Retention ratio 1.00 Asset turnover 1.03 23 Financial leverage N/A 24 Sustainable growth (g*) NA 25 Actual growth 2.88% NA 28 Part (b): Keep your response zithin the shaded area. Problem 10