Financial Accounting: What You Need to Know

Question 1 

Revenue growth is the process through which sales is increased or decreased over a period (Horngren, Sundem, & Elliott 2014).The target market which was supposed to be 10% in 2009 is unlikely to be hit. There is a minimal growth in 2008 which was 35.71% the other years had a negative growth. 

Question 2 

Sales growth is still on a negative side since the average growth rate is -3.5%. In my analysis, the company will not achieve its target of 10% annual growth. The company will have to strategies on how to increase its sales to achieve its annual revenue growth. 

Question 3 

Here you first forecast on the 30 % increase in the sale of 8334 which is 10, 834.2. So the calculation will be shown in the excel sheet below. 

The formula used was:- 

Operating expenses =Selling, general and administrative +R, and D +Restructuring cost (Koyuncugil & Ozgulbas, 2013). 

Operating income=Gross margin-operating expenses (Koyuncugil & Ozgulbas, 2013) 

Income before taxes=operating income +interest and other revenues (Koyuncugil & Ozgulbas, 2013). 

Taxes=15% of income before taxes. 

Net income= income before taxes – taxes ((Thomas, Tietz & Harrison, 2018). 

Question 4 

The assumption that was made in question 1 was that for the firm to hit the targets, it would require for the firm to expand an increase of employees all of which are an additional cost to the firm. For the sales to be increased there, need to be a lot of marketing that would boost sale for a short period. In my point of view, the company would be unable to hit the target since it is too high for the company to meet since the intensive marketing requires a lot of capital and movement to new markets. 

References 

Horngren, C. T., Sundem, G. L., & Elliott, J. A. (2014).  Introduction to financial accounting . Harlow: Pearson: Education Limited. 

Koyuncugil, A. S., & Ozgulbas, N. (2013).  Technology and financial crisis: Economical and analytical views . 

Thomas, C. W., Tietz, W. M., & Harrison, W. T. (2018).  Financial accounting .