00:01
Hello, shuns we need to write here, 123 incorporation has a profit margin of 15%.
00:08
Total asset turnover is given and dividend payout ratio is given.
00:12
What is the company's internal growth rate? so if i write here for this, first we need to calculate return on assets.
00:22
So what is the formula for that? if i write here, this must be net income divided by total assets.
00:30
Net income that can be divided by total, total assets.
00:37
So basically this may be, if i write here for this, this is equivalent to profit margin multiplied by total asset turnover.
00:48
Profit margin multiplied by, if i write here for this, total asset, total asset turnover.
00:59
So now if i write here for this, this will come out as this is 15 % multiplied by 2, which is basically 30 % now if i write for this, what would be our roa which is written on assets, this is referred as roa, this is 30 % we have calculated.
01:24
Now let us come to our retention ratio, what is the value of retention region? retention ratio would be is equal to 1 minus if i write here for this one minus dividend if i write here for this this is 1 minus dividend payout ratio pay out ratio and this is the value in percentage we all know 1 minus 60 % and this is 100 so this will come out as 40%.
01:56
Now if i calculate this further this will come out as finally we can write here we need our internal internal growth rate and if i write the formula for that this will come out as our roa value return on asset multiplied by retention ratio retention ratio if i write here for this this is 1 minus again this is roa multiplied by retention so let's erase this first this is retention ratio we need to add here if i write for this.
02:36
So this must be written as we need to correct the spelling for that.
02:40
This is retention.
02:42
Right.
02:43
And here also we need to correct...