Assignment
Part 1
Question Text
How does a company assess its sustainable growth rate (SGR)?
• How doesa firm use the SGR in decisionmaking?
• What are the consequences for a firm that grows a higher rate than its SGR?
• What are the consequences for a firmthat grows at a lower rate than its SGR?
Consider the following ideas to include in your answer:
• Which variables are used in calculating the SGR?
• How doesa firmuse the SGR in choosing a financing option?
• How doesafirm finance a growth that is higher than its SGR?
• What is the opportunity cost for a firm that grows at a lower rate than its SGR?
Part 2
Several types of stakeholders and investors attempt to arrive at an estimation of a company's financial performance and its future outlook for investment purposes, conducting business, self-evaluation of strengths and weaknesses, and extension of credit. They pose such questions as follows:
• What is the company's performance record and what are the future expectations?
• How much riskis inherent in the firm's existing capital structure?
• How successfully does the firm compete in its industry?
• What will be the source of debt repayments?
• How well does the company manage working capital?
• How wellhas the firm performed and why?
• What are the strengths and weaknessesof the company's financial position?
If you were performing this analysis, how would you go about doing it?
Consider the following ideas in your answer:
1. What type of financial data would you use and where would you get it?
2. What ratio analysis would you do?
3. How would you determine the leadership's performance in the company?
4. What would you consider as an indication of a successful company versus a poor performing company?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.