a.
To compute: Net profit margin for the year.
Introduction: Net income is the excess of revenue earned over its expenses. It helps the investors to analyze the profitability of the company and take appropriate decision, thereof.
b.
To compute: CAGR of revenue and net income using GEOMEAN function.
Introduction: Net income is the excess of revenue earned over its expenses. It helps the investors to analyze the profitability of the company and take appropriate decision, thereof.
c.
To compute: CAGR of revenue using AVERAGE function.
Introduction: Net income is the excess of revenue earned over its expenses. It helps the investors to analyze the profitability of the company and take appropriate decision, thereof.
d.
To present: Revenue and net income in column chart.
Introduction: Net income is the excess of revenue earned over its expenses. It helps the investors to analyze the profitability of the company and take appropriate decision, thereof.
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EBK FINANCIAL ANALYSIS WITH MICROSOFT E
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- You are creating a pro forma balance sheet for the upcoming year. You have already prepared a pro forma income statement, and are predicting total assets will increase by $185,000 due to the increase in sales you are anticipating. How will you choose to finance this new growth in order to make sure the balance sheet balances?arrow_forwardShow with a formula that describes the average estimatesustainable sales growth. Then, make a clear description and systematically about the relationship between its variables. What if a company doesn't experiencing “retention profit”?arrow_forwardWhich of the following is most likely true concerning the stability and trend of earnings? Question options: The stability and trend of earnings require at least five years of historical data to be meaningful. The stability and trend of earnings are key factors when calculating cost of sales. The stability and trend of earnings are not factored in the analysis of revenues. The stability and trend of earnings depend on the trend of a single industry.arrow_forward
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- Kevin is an employee in the finance department at Easy Trader Co. and is performing some financial analysis on the company's current year's performance. Before he can begin looking at a variety of nonfinancial factors, including customer conversion rates and internal promotion scores, he will need to evaluate some financial performance measures. Which of the following provides the most accurate rationale for evaluating economic value added? ◇ Evaluating profitability using a consistent measure like earnings without interest ○ Understanding the cash implications of a company's primary operating activities ◇ Evaluating after-tax income earned beyond the company's cost of capital on its invested capital O Evaluating income earned beyond the minimum required investmentarrow_forwardIt has been suggested that when applied to the percentage growth rate in a business, the law of large numbers implies that as a business grows, it becomes increasingly difficult to maintain its high growth rate in the past. What do you think of this argument? Can you provide an example to support your point of view? What does this mean for the FP&A in forecasting sales? What does it mean in terms of forecasting profit margins?arrow_forwardAnalysts and investors often use return on equity (ROE) to compare profitability of a company with other firms in the industry. ROE is considered a very important measure, and managers strive to make the company’s ROE numbers look good. A) If a firm takes steps that increase its expected future ROE, its stock price will increase. B) Based on your understanding of the uses and limitations of ROE, which of the following projects will a manager likely choose if his or her bonus is solely based on the ROE of the next project? Project Y, with 40% ROE and a small investment, generating low expected cash flows Project X, with 35% ROE and a large investment, generating high expected cash flows C) Suppose you are trying to decide whether to invest in a company that generates a high expected ROE, and you want to conduct further analysis on the company’s performance. If you wanted to conduct a comparative analysis for the current year, you would: Compare the…arrow_forward
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