Harley Davidson, Inc., the iconic motorcycle company, has the fol- lowing ratios for the years 2000 through 2004:
|
|
2000
|
2001
|
2002
|
2003
|
2004
|
|
Profit margin (%)
|
11.4
|
12.3
|
13.5
|
15.5
|
16.7
|
|
Retention ratio (%)
|
91.3
|
91.9
|
92.8
|
92.2
|
86.6
|
|
Asset turnover (X)
|
1.25
|
1.14
|
1.11
|
1.00
|
0.97
|
|
Assets (end of year, millions)
|
$2,436
|
$3,118
|
$3,861
|
$4,923
|
$5,483
|
|
Equity (end of year, millions)
|
$1,406
|
$1,756
|
$2,233
|
$2,958
|
$3,219
|
|
Growth rate in sales (%)
|
17.8
|
16.4
|
21.4
|
14.0
|
8.5
|
a. Calculate Harley Davidson's annual sustainable growth rate from 2001 through 2004.
b. Did Harley Davidson have a growth problem in these years?
c. How did Harley Davidson cope with its sustainable growth problems?