Q3SE - Horngren'S Financial And Managerial Accounting

Question

Muscateer Corp. reported the following revenues and net income amounts:

(In millions) 2019 2018 2017 2016

Revenue \( 9,610 \) 9,355 \( 9,050 \) 8,950

Net Income 7,290 6,790 5,020 4,300

Requirements

1. Calculate Muscateer’s trend analysis for revenues and net income. Use 2016 as the

base year, and round to the nearest percent.

2. Which measure increased at a higher rate during 2017–2019?

Step-by-Step Solution

Answer

Answer

Income Increases in 2019 as compared to past years

Step 1: Calculation

	2019	2018	2017	2016
Revenue $	9,610	9,355	9,050	8,950
	107%	105%	101%	100%
Net Income$	$7,290	6,790	5,020	4,300
	170%	158%	117%	100%

Step 2: Workings

	2019	2018	2017	2016
Revenue $	9,610	9,355	9,050	8,950
	9610/8950	9355/8950	9050/8950	8950/8950
Net Income$	$7,290	6,790	5,020	4,300
	7290/4300	6790/4300	5020/4300	4300/4300

Net Income increased rapidly from 2016- 2019