Problem 3-20 Calculating Internal Growth [LO 3]

The most recent financial statements for Shinoda Manufacturing Co. are shown below:

Income Statement			Balance Sheet
Sales	$	64,200	Current assets	$	28,000	Debt	$	44,200
Costs		44,680	Fixed assets		80,900	Equity		64,700
Taxable income	$	19,520	Total	$	108,900	Total	$	108,900
Tax (35%)		6,832
Net Income	$	12,688

Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 43 percent dividend payout ratio. No external financing is possible.

Required:

What is the internal growth rate?