Asked by Kiara Venegas on Jul 16, 2024
Verified
Which of the following is a factor in calculating sustainable growth?
A) Current ratio
B) Profit margin
C) Inventory turnover
D) Cash ratio
E) Cash coverage ratio
Sustainable Growth
The peak growth rate a business can achieve for its revenue, profits, and dividends without escalating its debt or raising more equity capital.
Profit Margin
An indicator of a company's financial health, calculated as net income divided by revenue, and expressed as a percentage.
- Determine the elements affecting the rates of sustainable and internal growth.
Verified Answer
AV
Alejandra ValenciaJul 19, 2024
Final Answer :
B
Explanation :
Profit margin is a factor in calculating sustainable growth because it measures how much profit a company makes for every dollar of sales, which directly affects the company's ability to reinvest in itself and grow sustainably.
Learning Objectives
- Determine the elements affecting the rates of sustainable and internal growth.
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