Part II- Ratio Analysis and Forecasting Modeling
8.6: Forecasting Solution
68 of 150 · 91 words
From Introduction to Financial Analysis by LibreTexts (Kenneth S. Bigel, Touro University), used under the CC BY 4.0 licence. Written for a general audience, not for NEPSE.
Provide some interpretive statements or comments about this company’s (or investment project’s) prospects . Specifically, calculate the growth rates for each year versus its prior year – for GP, EBIT, and NI.
The Growth Rate is calculated as: (Next Year’s Number ÷ Last Year’s number) – 1.
For example, how much higher, in percentage terms, is the GP for “Year 1” in comparison to “Last Year”? Do this for each year until you get to Five versus (or “over”) Four. Use four decimal places throughout. What do you find and why?
This chapter at LibreTexts (Kenneth S. Bigel, Touro University). Tables and text are reproduced; images, videos and quizzes are not.