Question

Input
Tesla, Inc.
2017 Income Statement			Other Inputs
Sales	40,259,230		Tax rate	40%
COGS	29,336,446		Growth rate	15%
Other expenses	5,105,100		Capacity Utilization	100%
Depreciation	1,804,220
EBIT	4,013,464
Interest	630,520
Taxable income	3,382,944
Taxes (40%)	1,353,178
Net income	2,029,766
Dividends	610,000
Add to RE	1,419,766
Tesla, Inc.
Balance Sheet as of December 2017
Assets			Liabilities & Equity
Current Assets			Current Liabilities
Cash	456,435		Accounts Payable	929,005
Accounts rec.	733,125		Notes Payable	2,121,350
Inventory	1,073,180		Total CL	3,050,355
Total CA	2,262,740
			Long-term debt	5,500,000
			Shareholder Equity
Fixed assets			Common stock	400,000
Net PP&E	17,723,430		Retained earnings	11,035,815
			Total Equity	11,435,815
Total Assets	19,986,170		Total L&E	19,986,170
Calculation & Output
Question 1
Return on assets
Return on equity
payout ratio
Retention ratio
Internal growth rate
Sustainable growth rate

Answer 1

Answer-

Return on Assets = Net Income/ Total Assets

= 2,029,766/19,986,170

= 0.1015 or 10.15%

Return on Equity = Net Income/Shareholders' Equity

= 2,029,766/11,435,815

= 0.1774 or 17.74%

Payout Ratio = Dividends/Net Income

=  610,000/2,029,766

= 0.30 or 30%

Retention Ratio = 1-Payout ratio

= 1-0.30

= 0.70 or 70%

Internal Growth Rate = (Return on Assets*Retention Ratio)/[1-(Return on Assets*Retention Ratio)]

= (0.1015*0.70)/[1-(0.1015*0.70)]

= 0.07105/0.92895

= 0.0764 or 7.64%

Sustainable Growth Rate = Return on Equity*Retention Ratio

= 0.1774*0.70

= 0.12418 or 12.418%