Last year Axle Inc. reported net assets of $400, equity of $200, net income of $50, dividends of $10, and earnings retained in the period of $40. What is Axle Inc.'s internal growth rate?

Question

Quizplus · Accepted Answer

The internal growth rate is calculated as the retained earnings divided by the net assets. Here, retained earnings are $40, and net assets are $400. So, the internal growth rate is ($40 / $400) * 100 = 10.0 percent.

Last Year Axle Inc