Given the following data, create a simple forecasting model for the year of 2017

Question

Given the following data, create a simple forecasting model for the year of 2017 for 2 or 3 categories (Sales/revenue, net income, etc.) pole Steve BoddekrSPH Projectile at an ang Bookmark Manager d-ons Help All changes saved in Drive A GD Annual Income Statement Fiscal year is November-October. All values USD millions 2012 2013 2014 2015 2016 5-year trend Sales/Revenue 45.59M46.182M 47.7SM 46.70M 50.14M 1.29% | 341% -2.21% 29.73M 30.44M 34.32M 29.92M 30.37M 29.11M 29.64M 33.30M 28.82M 29.28M Sales Growth Cost of Goods Sold (COGS) incl D&A; COGS excluding D&A; Depreciation & Amortization Expense 5M 0M 101M 1.09M 108M Depreciation 615MM 1.01M 1.09M 1.08M Amortization of Intangibles

Explanation / Answer

ANNUAL INCOME STATEMENT Fiascal year November -October. All values in USD millions 2012 2013 2014 2015 2016 (Projected Figure) 2017 SALES/REVENUE 45.59 46.182 47.75 46.7 50.14 52.67 Sales Growth Rate 1.29% 3.14% -2.21% 7.37% 5.037% (Ref- Note -1) Cost of Good Sold Including D&A 29.73 30.44 34.32 29.92 30.37 31.83 Costs excluding D&A 29.11 29.64 33.3 28.82 29.28 30.75 Depriciation & Amortisation exp 0.615 0.8 1.01 1.09 1.08 1.08 (Ref- Note-2) Gross Income 15.85 15.73 13.43 16.77 19.73 20.83 SG & A Expences 14.42 14.63 15.02 13.87 15.88 16.68 Pre Tax Income 1.43 1.1 -1.58 2.9 3.88 4.15 Assuming Income Tax @30% For 2017 Income Tax Expences 0.13067 0.06502 -0.0315 -2.62 1.09 1.25 Net Income 1.3 1.04 -1.55 5.52 2.78 2.91 Note-1 Computaion of Future Growth percentage (weighted average method) 2013 2014 2015 2016 Sales Growth Rate 1.29 3.41 7.37 weight 1 2 3 Sales Growth Rate * weight 1.29 6.82 0 22.11 Sum= 30.22 Weghted average= 30.22/6 = 5.037 As in 2015 growth is negative ,hence not considered while computing through weighted average method. Every where Groeth rate is taken @5.037% (unless otherwise meintioned) Note-2 2012 2013 2014 2015 2016 Depriciation & Amortisation exp 0.615 0.8 1.01 1.09 1.08 Groth Rate 30.0813 26.25 7.920792 -0.91743 As Depreciation expences growing in decreasing rate , it will be prudent to consider 2016 figure for forcasting 2017 purpose .

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