Calculate biosites sustainable growth rate in each year

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Reference no: EM13892243

Biosite, Inc. is a developer, manufacturer, and marketer of medical di- agnostic products in San Diego, California. If you wanted to test for parasites, drug abuse, or congestive heart failure, you would be wise to contact Biosite. Following are selected financial data for the company for the period 2000-2004.

 

 

2000

2001

2002

2003

2004

Profit margin (%)

11.2

10.3

12.7

14.3

16.9

Retention ratio (%)

100.0

100.0

100.0

100.0

100.0

Asset turnover (X)

0.66

0.64

0.80

0.89

0.86

Assets (end of year, millions)

$83.0

$102.7

$131.3

$194.6

$283.5

Equity (end of year, millions)

$72.9

$ 90.9

$107.9

$152.9

$220.3

Growth rate in sales (%)

25.8

19.4

60.3

64.8

41.3

a. Calculate Biosite's sustainable growth rate in each year from 2001 through 2004.

b. Comparing the company's sustainable growth rate with its actual growth rate in sales, what growth management problems did Biosite face over this period?

c. How did the company cope with these problems?

Reference no: EM13892243

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