Calculate harley davidsons annual sustainable growth rate

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Harley Davidson, Inc., the iconic motorcycle company, has the fol- lowing ratios for the years 2000 through 2004:

 

2000

2001

2002

2003

2004

Profit margin (%)

11.4

12.3

13.5

15.5

16.7

Retention ratio (%)

91.3

91.9

92.8

92.2

86.6

Asset turnover (X)

1.25

1.14

1.11

1.00

0.97

Assets (end of year, millions)

$2,436

$3,118

$3,861

$4,923

$5,483

Equity (end of year, millions)

$1,406

$1,756

$2,233

$2,958

$3,219

Growth rate in sales (%)

17.8

16.4

21.4

14.0

8.5

a. Calculate Harley Davidson's annual sustainable growth rate from 2001 through 2004.

b. Did Harley Davidson have a growth problem in these years?

c. How did Harley Davidson cope with its sustainable growth problems?

Reference no: EM13892236

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