Tomey Supply Company’s financial statements for the most recent fiscal year are shown below. The company management projects that sales will increase by 13 percent next year. Assume that all costs and assets increase directly with sales. The company has a constant 37 percent dividend payout ratio and has no plans to issue new equity. Any financing needed will be raised through the sale of long-term debt. Using the forecasted income and dividend information for Tomey Supply, find the internal growth rate for Tomey.
Tomey Supply Company Income Statement and Balance Sheet Income Statement Balance Sheet
Net sales $1,768,121 Assets Costs 1,116,487 Current Assets $280,754 EBT $651,634 Net Fixed Assets 713,655 Taxes (35%) 228,072 Total assets $994,409 Net Income $423,562 Liabilities and Equity: Current Liabilities $167,326 Long-term debt 319,456 Common Stock 200,000 Retained Earnings 307,627 Total liabilities & equity $994,409.
The Internal growth rate is: _________ % (Round intermediate calculation to the nearest whole dollar, e.g. 5,275 and final answer to 2 decimal places, e.g. 15.25%.)