You have been told that a company had sales of ,000 last year. The company paid a dividend of ,120 last year. It had debt of ,000 and total equity of ,000. Assets and costs are proportional to sales (therefore, assets and costs increase at the same rate as sales). The company"s dividend payout ratio will not change next year. Next year"s sales are projected to be ,000. Example 2: assume that j&f, inc. is operating at 85 percent of capacity. All costs and net working capital vary directly with sales. Projected sales * per dollar of sales = 34,680* 0. 37764. Internal growth rate (igr) = b= retention ratio. Sustainable growth rate = roe x b / (1 roe * b)n. Roe = profit margin (profit/ sales) * total asset turnover (sales/ assets) * equity multiplier (assets/equity) Roa is the same as roe except no equity multiplier. 123 inc has a profit margin of 15%.