Question 1 Planning models that are more sophisticated than the percent of sales method have working capital accounts like inventory, accounts receivables,and accounts payables vary directly with sales.
Question 2 Firms that achieve higher growth rates without seeking external financing
- are not highly leveraged.
- have less equity and/or are able to generate high net income leading to a high ROE. a
- ll of these are true.
- have a high plowback ratio.
Question 3 External financing needed: Triumph Company has total assets worth $6,413,228. Next year it expects a net income of $3,145,778 and will pay out 70 percent as dividends. If the firm wants to limit its external financing to $1 million, what is the growth rate it can support?