Use the following pro forma information for Tomey Supply Company for next year: net income = $508,275;

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Use the following pro forma information for Tomey Supply Company for next year: net income = $508,275; addition to retained earnings = $340,544; common equity = $848,171; net sales = $2,121,745. Assume that management does not want the ratio of long-term debt to equity to exceed the current long-term debt-to-equity ratio of 63 percent and also does not want to issue new equity. What level of sales growth can Tomey Supply Company sustain? Calculate the new sales level.


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Fundamentals of corporate finance

ISBN: 978-0470876442

2nd Edition

Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates

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