Discussion:
Q: Bannister Legal Services generate $2,000,000 in sales during 2010, its year-end total assets were $1,500,000. Also, at year-end 2010, current liabilities were %500,000, $2,000,000 note payable, $200,000 of accounts payable, and $100,000 of accurals. Its profit margin will be 5%, and its payout ratio will be 60%. How large a sales increase can the company achieve without having to raise funds externally; that is, what is its self supporting growth rate?