Assets and costs are proportional to sales. Debt & equity are not. Filer Manufacturing Co. maintains a constant 40% dividend payout ratio. No external financing is possible. What is the internal growth rate?
How do I determine the addition to retained earnings to compute the plowback ratio?
Attached is the income statement and balance sheet.© BrainMass Inc. brainmass.com December 24, 2021, 4:41 pm ad1c9bdddf
You have to ascertain addition to retained earnings but it is not given anywhere in the balance sheet.
Now, I will give you another approach, think with an open mind. You have $100 and two options- spend it or retain it for future use or do a mix of the ...
The solution explains the concepts and calculates the answers to the questions about internal growth rate and plowback ratio.