Question

Gadgets Inc. has the following information. Compare the spread between actual and sustainable growth for 1998 with the spread for 2001 only, what is the main reason for the change in spread? Compare the components of the sustainable growth rate for the two years to see how each has contributed to the decrease/increase in sustainable growth Gadgets ($ in millions)

Gadgets ($ in millions)
	1996	1997	1998	1999	2000	2001
Sales		$      128.40	$        171.60	$       208.20	$      241.60	$        288.40
Net income		8.00	8.30	0.40	6.10	12.80
Total assets		64.70	84.30	86.40	96.70	118.80
Equity	30.80	49.10	58.50	60.00	66.10	79.40
Dividends		-	-	-	-	-

Answer 1