Table 3.1 in the last chapter presents R&E Supplies’ financial statements for the pe...

Table 3.1 in the last chapter presents R&E Supplies’ financial statements for the period 2011 through 2014, and Table 3.5 presents a pro forma financial forecast for 2015. Use the information in these tables to answer the following questions.

a. Calculate R&E’s sustainable growth rate in each year from 2012 through 2015.

b. Comparing the company’s sustainable growth rate with its actual and projected growth rates in sales over these years, what growth management problems does R&E appear to face in this period?

c. How did the company cope with these problems? Do you see any difficulties with the way it addressed its growth problems over this period? If so, what are they?

d. What advice would you offer management regarding managing future growth?