Year-to-year percentage annual growth in total net sales

G = (NSt/NSt-1 -1)*100%, where NS represents total net sales, G represents annual growth, and t, t-1 represent year indexes.

For 2008 and 2007, for example, the computation is: 8334/6141 -1 *100% = 35.71%

With Excel, I use the same formula that I used in 2004-2007 for other years.

Net Sales in 2004-2005-2006-2007-2008: 11062 11933 9181 6141 8334

Yearly increase (%) 7.87% -23.06% -33.11%

35.71%

2. Based on the formula’s results, I believe the corporation will fall short of its sales objective of +10% annual revenue growth in 2009.

In dollars, the target revenue for 2009 year is 8334*1.1 = 9167.4 $

Using average values, I can evaluate the annual growth for the 2009 year based on previous figures.

Applying arithmetic average on annual growths gives -3.15%. Applying geometric average on annual growth gives -7.83%. Both figures are worse than +10% growth. To count these values I use Excel functions “average” and ”geomean” (on growth figures in form of 107.87%, 76.94%).

3. Next is a Statement of Operations figures evaluation for 2008 and 2009 year.

2008

2009

Sales

8334

10834.2

1.3

Cost of Goods Sold

7379.88

9593.85

1.3

Restructuring costs

0

541.71

0.05

Taxable Income

954.12

698.64

Taxes

143.12

104.8

0.15

Net Income

811

593.85

To count Net Sales, I use a coefficient 1.3 representing 30% growth: 8334*1.3 = 10834.2$

To count Restructuring costs (5% of Sales): 10834.2*0.05 = 541.71 $

To count Cost of Goods Sold, I first measured this figure for 2008 and then used a coefficient 1.3.

Cost of Goods Sold in 2008 year: Sales – Taxable Income = 8334 – (811 /85 *100) = 7379.88 $

Cost of Goods Sold in 2009 year: 7379.88*1.3 = 9593.85 $

Taxable Income = Sales – Cost of Goods Sold – Restructuring costs = 10834.2 – 9593.85 – 541.71 = 698.6 $

Taxes = Taxable Income * Tax Rate = 698.64* 0.15 = 104.8 $

Net Income (loss) = Taxable Income – Taxes = 698.64 – 104.8 = 593.85 $

4. Application of the same growth coefficient for sales and sales costs means an assumption of the same growth in sales and cost of sales. An assumption of the same growth in sales and cost of sales may be unreasonable as technologies of sales could change in a year and selling of one item become more or less expensive. The second assumption of the same tax rate for two years also may be irrelevant as laws may change this rate in the period.