Nobility Homes, Incorporated, is a small maker of manufactured homes sold throughout the state of Florida. The following are selected financial data for the company for the period 2012-2016. Profit margin (%) Retention ratio (%) Asset turnover (X) Financial leverage (X) Growth rate in sales (%) 2012 0.5 2013 6.0 2014 2015 2016 5.5 9.5 17.5 100.0 100.0 100.0 100.0 100.0 0.45 0.50 0.55 0.60 0.65 1.10 1.14 1.17 1.22 1.30 17.5 17.0 14.5 31.0 22.5 Source: Data from Nobility Homes 2012 to 2016 annual reports a. Calculate Nobility Homes' annual sustainable growth rate for the years 2012 through 2016. Note: Round your answers to 1 decimal place. Year 2012 2013 2014 2015 Sustainable Growth Rate % % % %
Nobility Homes, Incorporated, is a small maker of manufactured homes sold throughout the state of Florida. The following are selected financial data for the company for the period 2012-2016. Profit margin (%) Retention ratio (%) Asset turnover (X) Financial leverage (X) Growth rate in sales (%) 2012 0.5 2013 6.0 2014 2015 2016 5.5 9.5 17.5 100.0 100.0 100.0 100.0 100.0 0.45 0.50 0.55 0.60 0.65 1.10 1.14 1.17 1.22 1.30 17.5 17.0 14.5 31.0 22.5 Source: Data from Nobility Homes 2012 to 2016 annual reports a. Calculate Nobility Homes' annual sustainable growth rate for the years 2012 through 2016. Note: Round your answers to 1 decimal place. Year 2012 2013 2014 2015 Sustainable Growth Rate % % % %
Chapter5: Evaluating Operating And Financial Performance
Section: Chapter Questions
Problem 7EP
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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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