Question 1. As you are trying to get a better grasp of the growth potential of the company, you decide to look the the IGR and SGR numbers.

(a) Compute the IGR and SGR.

(b) What do each of those mean?

Statements Income Statement 40% Sales COGS Other expenses Depreciation EBIT Interest Taxable income Taxes (40%) Net income $43,000,000 $30,000,000 $5,000,000 $2,000,000 $6,000,000 $2,000,000 $4,000,000 $1,600,000 $2.400.000 Taxes: Shares Outstanding Market-to-Book Ratio Depreciation of New Assets Dividend growth in the last 7 years 1,000,000 1.25 25.00% 8.00% Dividends Add to RE $600,000 $1,800,000 Balance Sheet Assets Current Assets Cash Accounts Receivable Inventory Total CA Fixed Assets Net PP&E $500,000 $1,000,000 $2,000,000 $3,500,000 Liabilities & Owners' Equity Current Liabilities Accounts Payable Notes Payable Total CL Long Term Debt Owners' Equity Common Stock Retained Earnings Total Equity Total L & OE $1,000,000 $3,000,000 $4,000,000 $10,000,000 $25,000,000 $6,500,000 $8,000,000 $14,500,000 $28,500,000 Total Assets $28,500,000