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Finace (IGR, SGR, EFN) - Case Study Example
Author : calliebeatty
Finance & Accounting
Pages 3 (753 words)
FINANCE Table of Contents Table of Contents 2 Background 3 Question 1: 4 Internal Growth Rate (IGR) 4 Sustainable Growth Rate (SGR) 5 Question 2: 6 External Financing Needed (EFN) 6 Question 3: 7 References 8 Appendices 9 Appendix 1 9 Appendix 2 11 Background S&S Air is a profitable public company…
The remaining income was added back as the retained earnings for the company. This type of retained earnings generally helps companies like S&S Air to provide for internal financing required for further investments in the company. However, in the past S&S Air did not have proper planning regarding the investment opportunities of the company. As a result of this, the company lost sales in the past and had to go through crunch situations as regards to the liquidity position of the company. Hence the company is requiring the need for proper planning for its future investments. Ratio analysis has been done to analyze the current financial condition of the company. Next utilizing the financial ratios calculated, the owners of the company is willing to have a proper financial planning of S&S Air in future. The company needs this type of planning to decide upon the forecasted sales next year which the company can expect to generate. Moreover it would also help the company to know whether any external financing is required to have the desired growth of the company next year. The company management also needs to have a proper idea about its current efficiency in utilizing its capacity so that improvements can be made if the capacity utilization of the company is less. ...
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