How do we get the retention ratio ? How do we get the retention ratio ? 9:34 AM

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How do we get the retention ratio ? How do we get the retention ratio ? 9:34 AM 3916 Expert Q&A; Using formulas Pyth, total assets, $500, (net) profit megin, "k accrued liabilities, $30, dividend payout tim projectedgrowthrate in sales, 30% The company isoperatingatfulapsty. Andid spontaneous liabilities must increase by the projected growth rate in sales. Calculate the additional funds needed. (Do not construct any financial statements.)110 points) company: Sales revenue, S Kao 4. Cosikr the following intímnation about 0 1 solution somesh 28 minutes later Additional funds needed increase in assets increase in liabilities -increase in retained earnings Increase in assets = assets × sales growth rate -500*3090 1 50 increase in liabilities-liabilities*sales growth rate 70*30%-21 increase in retained earnings sales (1+growth rate)*profit margin*retention ratio 350"(1.3)*5%*39.56% 8.999 = 9 Additional funds needed 150-21-9-120 Pol Was this answer helpful? 1g "Po

Explanation / Answer

Retention Ratio = 1 - Dividend Payout Ratio
Retention Ratio = 1 - 0.6044
Retention Ratio = 0.3956
Retention Ratio = 39.56%

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