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The most recent financial statements of Cinderella Shoes are shown below. Assets, costs and current...

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Finance

The most recent financial statements of Cinderella Shoes are shown below. Assets, costs and current liabilities are proportional to sales. Long-term debt and equity are not. The company maintains a 40% dividend payout ratio. Which of the following statements is true?

image

The internal growth rate exceeds the sustainable growth rate by at least 3 percentage points

The sustainable growth rate exceeds to internal growth rate by more than 9 percentage points.

The return on equity (ROE) equals the return on assets (ROA)

The debt to total assets ratio is higher than the debt to equity ratio.

$ $ Current assets Fixed assets Sales Costs Taxable income Taxes Net income 8,000 6,000 2,000 500 1,500 4,000 Current liabilities $ 8,000 Long-term debt Equity 12,000 Total $ 2,100 3,700 6,200 12,000 $ Total assets $ $

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