Q14E
Question
Grand Oaks Realty’s net revenue & net income for the following five-year period using 2015 as the base year, follow:
Requirement:
Compute a trend analysis for the net revenue & net income. Round to the nearest full percent.
Which grew faster during the period, net revenue or the net income?
Step-by-Step Solution
Verified Answer
Answer
1. Given below
2. Net Income Increasing More as Compare to Revenue per year.
1Step 1: Calculation of Trend % as per revenue
2019 (a) | 2018 (b) | 2017 (c) | 2016 (d) | 2015 (e) | |
Net revenue | $1,360,000 | $1,180,000 | $1,147,000 | $1,008,000 | $1,044,000 |
Trend percent | 130% | 113% | 110% | 97% | 100% |
(a/e) | (b/e) | (c/e) | (d/e) | (e/e) |
2Step 2:Calculation of Trend % as per income
2019 (a) | 2018 (b) | 2017 (c) | 2016 (d) | 2015 (e) | |
Net income | 127,000 | 120,000 | 87,000 | 75,000 | 83,000 |
Trend percent | 153% | 145% | 105% | 90% | 100% |
(a/e) | (b/e) | (c/e) | (d/e) | (e/e) |
3Step 3: Comment
Requirement 2
Net income grew faster as compared to net revenue.
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