Q1) Inkheart Inc has profit margin of 11% and retention ratio of 70%. Last year, firm had sales of $500 and total assets of $1,000. Desired total debt ratio is 75%. Determine firm's sustainable growth rate (SGR)?
Hint: SGR = (ROE x Retention Ratio) / (1- ROE x Retention Ratio)
Q2) Compute value of cost of goods sold for Large Stone Brewing provided the following information:
Current liabilities = $340,000;
Quick ratio = 1.8;
Inventory turnover = 4.0;
Current ratio = 3.3.