Last year Foley Inc. reported total assets of $500, equity of $200, net income of $120, dividends of $70 and earnings retained in the period of $50. What is Foley Inc.'s internal growth rate?

Question

Quizplus · Accepted Answer

The internal growth rate is calculated as the retained earnings divided by the total assets. Here, retained earnings are $50 and total assets are $500. So, the internal growth rate is ($50/$500) * 100% = 10.0%.

Last Year Foley Inc