Question

Tree top furniture has current sales of $311,000 and fixed assets of $198,000. The firm is currently operating at 85 percent of capacity. What is the maximum percentage increase the firm can have in sales without investing in additional fixed assets?

Answer 1

Explanation:

The sustainable growth rate (SGR) is the maximum rate of growth that a company or social enterprise can sustain without having to finance growth with additional equity or debt. The SGR involves maximizing sales and revenue growth without increasing financial leverage