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Ratios Are Useful in Explaining the

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Ratios are useful in explaining the


Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and earnings without needing to increase its financial leverage or equity financing, based on its current profitability, asset utilization, dividend policy, and debt/equity ratio.

Dividend Payout Ratio

A financial ratio that shows what portion of a company's earnings is distributed to shareholders in the form of dividends.

Debt-Equity Ratio

A ratio that delineates how company assets are proportionally funded through equity and debt.

Plug Figure

A number inserted into a financial calculation or model to make the numbers balance, often representing missing or estimated data.

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