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Holy fack, I can't stand Business Finance 101.

E

E equals MC2

Banned
I just spent my stupid ass straight out of work til NOW (10:20pm) working on 30 problems. I didn't even eat dinner. I finally did them all except for bottom two.

Some company:

Sales $200,000
Debt 95,000
Dividends 5,000
Equity 40,000
Net income 16,000

Sustainable Growth rate is 37.93%, I figured it out from previous problem.

Question 1: How much additional debt will Company require to keep the current debt-equity ratio constant if the company were to grow at the sustainable growth rate?

Question 2: At what growth rate could Company grow if it did not wish to increase the amount of debt?
Click to expand...

WTF I don't even know where to begin. Can you help?
 
Originally posted by: Capt Caveman
Did you not pay attention in class to figure out how to solve the problem?

Where you going to school?
Click to expand...

It's an online course and professor has his materials literally SCATTERED throughout the web, ppt, and audio recordings. That four hours I spent on these 30 questions were not mostly spent on doing the problem, but rather freaking treasure hunting where the relevant materials are.
 
How can that question be answered if you don't know the itnerest rate that hte debt is being charged at?

And even knowing that, I give it he big WTF
 
Originally posted by: IHateMyJob2004
How can that question be answered if you don't know the itnerest rate that hte debt is being charged at?

And even knowing that, I give it he big WTF
Click to expand...

Welcome to my life in the past 4 hours.
 
Originally posted by: E equals MC2
Originally posted by: IHateMyJob2004
How can that question be answered if you don't know the itnerest rate that hte debt is being charged at?

And even knowing that, I give it he big WTF
Click to expand...

Welcome to my life in the past 4 hours.
Click to expand...

make an assumption?

ie, "assuming an interest rate of X % per year...."
 
Originally posted by: Fenixgoon
Originally posted by: E equals MC2
Originally posted by: IHateMyJob2004
How can that question be answered if you don't know the itnerest rate that hte debt is being charged at?

And even knowing that, I give it he big WTF
Click to expand...

Welcome to my life in the past 4 hours.
Click to expand...

make an assumption?

ie, "assuming an interest rate of X % per year...."
Click to expand...

Well SGR percentage is provided... I just emailed the professor too.
 
When you say sustainable growth rate, are we talking sales or net or dividends? Yes, I said dividends. What exactly is the growth rate defined as?
 
I took all the accounting and finance classes required for a BB and then promptly reacquired those brain cells allocated for those classes by forgetting everything I learned.

 
hahaha....workin in finance...you dont do this shit day to day....its just to learn the theories, etc....we have software that does all the calculations for us
 
Originally posted by: E equals MC2
I just spent my stupid ass straight out of work til NOW (10:20pm) working on 30 problems. I didn't even eat dinner. I finally did them all except for bottom two.

Some company:

Sales $200,000
Debt 95,000
Dividends 5,000
Equity 40,000
Net income 16,000

Sustainable Growth rate is 37.93%, I figured it out from previous problem.

Question 1: How much additional debt will Company require to keep the current debt-equity ratio constant if the company were to grow at the sustainable growth rate?

Question 2: At what growth rate could Company grow if it did not wish to increase the amount of debt?
Click to expand...

WTF I don't even know where to begin. Can you help?
Click to expand...

it's been a while since I took financial management, but I think you can solve question 1 by first finding the debt-equity ratio. To find the debt equity ratio you have to divide all your debts and liabilities by the equity you have. Now, keeping in mind that the sustainable growth rate is 37.93% you have to calculate the addition debt the company can incur while keeping the same debt-equity ratio calculated earlier. I'm not goint to do the whole problem, but I think you should be able to solve with the info I gave you.

 
math for business class....probably the easiest bullshit you will ever be asked to do. shit shouldn't even be called college.
 
The secret to these business classes (accounting, finance, etc) is that you shouldn't overthink these problems. They are essentially business math which is really easy. I think you should start by realizing most of the data given isn't going to be necessary to figure out the problem.

I took Financial Accounting 251, 252, and Managerial accounting (253) and only showed up on the test days and taught myself everything in the book. Did well in them too. Of course, I've never taken a finance course lol.
 
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