The CEO of St. Hubbins International Traders, David St. Hubbins, gave a speech at the annual shareholders meeting in which he pledged to maintain a 3.5% growth rate of sales without increasing the company’s debt load.
An abridged look at the company financials a few weeks later offered these details:
SALES = $31.5 million
ASSETS = $26.7 million
DEBT TO EQUITY RATIO = .75
DIVIDEND PAYOUT RATIO = .55
The company is waiting on final figures for profits …
Based upon this data, what will the profits need to be in order for Mr. St. Hubbins to keep his pledge?