Which of these ratios are the determinants of a firms sustai

Which of these ratios are the determinants of a firm\'s sustainable growth rate?

I. Assets-to-equity ratio
II. Profit margin
III. Retention ratio
IV. Asset turnover ratio

I and III only

II and III only

II, III, and IV only

I, II, and III only

I, II, III, and IV

None of the above

Solution

Answer:I, II, III, and IV

Sustainable Growth Rate:

Asset / Equity x Sales / Asset x Profit / Sales x Retention Ratio

Profit / Equity x Retention Ratio = ROE x Retention Ratio