Problem 4-6 Calculating Internal Growth [LO3]

The most recent financial statements for Schenkel Co. are shown here:

Income Statement				Balance Sheet
Sales	$	17,600		Current assets	$	10,700		Debt	$	15,200
Costs		12,000		Fixed assets		25,750		Equity		21,250
Taxable income	$	5,600		Total	$	36,450		Total	$	36,450
Taxes (40%)		2,240
Net income	$	3,360

Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 40 percent dividend payout ratio. No external financing is possible.

What is the internal growth rate? (Do not round intermediate calculations. Enter your answer as a percent rounded 2 decimal places, e.g., 32.16.)

Internal growth rate

%