Consider the Following Information for Smart Products: Total Assets=$1000; Sales=$1540;

question 91

Multiple Choice

Consider the following information for Smart Products: total assets=$1000; sales=$1540; net profit margin=12%; dividend payout ratio=40%; equity=$555.What is Smart Products' sustainable growth rate?

• A) 7%
• B) 13%
• C) 25%
• D) 52%

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Definitions:

Liquidity

The ease with which assets can be converted into cash without significant loss in value, crucial for meeting immediate and short-term obligations.

Asset Management

The organized method of creating, managing, preserving, and trading assets in an economically efficient way.

Profitability

A measure of the efficiency of a company in generating profits from its operations, typically evaluated through various financial ratios.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.