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Phoniex University
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     6.          Calculating Internal Growth   The most recent financial statements for Live Co. are shown here:
Â
Â
|
Sales |
$17,500 |
Current assets |
$10,400 |
Debt |
$17,500 |
|
Costs |
11,800 |
Fixed assets |
28,750 |
Equity |
21,650 |
|
Taxable income |
$Â 5,700 |
Total |
$39,150 |
Total |
$39,150 |
|
Taxes (40%) |
2,280 |
 |
 |
 |
 |
|
Net income |
$Â 3,420 |
 |
 |
 |
 |
Â
Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. No external equity financing is possible. What is the internal growth rate?
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