Explore BrainMass

Explore BrainMass

    Growth Rate

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A) 1-Determine the year-to-year percentage annual growth in total net sales
    2-Do you think the company will hit its sales goal of plus 10 percent annual revenue growth in 2005?Determine the target revenue figure,and explain why you do or do not feel that the company can hit this target .
    Fiscal years 2004 2003 2002 2001 2000
    net sales 8,334 6,141 9,181 11,933 11,062
    net income loss per
    common share
    Basic $5.65 $3.84 $(9.15) $(6.89) $3.50
    Diluted $4.64 $3.07 $(9.15) $(6.89) $(3.50)
    Cash dividends
    declared per common
    share $- $- $- $0.12 $0.48
    Shares usesd in
    computing (loss)
    per share
    Basic 143,500 135,000 136,000 144,500 121,192
    Diluted 174,900 169,000 136,000 144,500 123,047
    Cashs,cash
    equivalents and
    short-term
    investments $5,426 $4,600 $3,859 $3,495 $952
    Total assets $6,161 $5,289 $5,233 $6,364 $6,231
    Long term debt$300 $954 $951 $949 $303
    Shareholders
    equity $3,104 $1,642 $1,200 $2,058 $2901

    B)Consider Micro Chip's Consolidated statement of Operations for the year ended
    SEP 25,2004.1-Use the percentage Sales Method and a 20 percent increase insales
    to forecast 26,203 through SEP25,2004 .Assume a 15 percent tax rate and restructuringcosts of 2 percent of the new sales figure .2-Discuss your results from question #1.What assumption have you made .Do any of your assumptions seem unreasonable
    2-Micro Chip Computer Corporation for the Period September 26,2003 through September 25,2004.
    Sales $8,334.00
    Cost of Sales $5,458.00
    GROSS MARGIN$2,876.00
    Operating Expenses:
    R&D $525.00
    Selling,general and Administrative $691.00
    In process R&D -
    Restructuring costs -
    Total Operating Expenses $1,216.00
    Operating income $1,660.00
    Total interest and other income net $194.00
    Income before provisions for income taxes $1,854.00
    Provisions for income taxes $278.10
    Net Income $1,575.90

    © BrainMass Inc. brainmass.com June 3, 2020, 6:23 pm ad1c9bdddf
    https://brainmass.com/business/accounting/growth-rate-57793

    Solution Preview

    A1. The year on year calculation are in the attached file. The formula for calculating year on year growth is (year2-year1)/year1.

    2. The target revenue figure in 2005 is 10% higher than in 2004. The figure is 8334 X 1.10 = $9,167.4 million. I feel the can hit this target because -
    a. The sales in 2004 are up 35.7% over 2003. There is a growth ...

    Solution Summary

    The solution explains how to calculate year to year growth rate in sales. To use the growth rate to calculate the target revenue. The use of percentage of sales method to forecast the income statement.

    $2.19

    ADVERTISEMENT