Question

Financial Statement Data and Stock Price Data for Mydeco Corp.
​(All data as of fiscal year​ end; in​ $ millions)
Income Statement	20122012	20132013	20142014	20152015	20162016
Revenue	405.9405.9	361.7361.7	427.4427.4	512.7512.7	603.6603.6
Cost of Goods Sold	( 186.4 )(186.4)	( 169.9 )(169.9)	( 202.3 )(202.3)	( 248.5 )(248.5)	( 295.4 )(295.4)
Gross Profit	219.5219.5	191.8191.8	225.1225.1	264.2264.2	308.2308.2
Sales and Marketing	( 66.5 )(66.5)	( 67.0 )(67.0)	( 80.9 )(80.9)	( 98.4 )(98.4)	( 121.2 )(121.2)
Administration	( 60.1 )(60.1)	( 58.5 )(58.5)	( 61.0 )(61.0)	( 68.3 )(68.3)	( 76.7 )(76.7)
Depreciation​ & Amortization	( 29.2 )(29.2)	( 28.4 )(28.4)	( 34.8 )(34.8)	( 39.7 )(39.7)	( 37.3 )(37.3)
EBIT	63.763.7	37.937.9	48.448.4	57.857.8	73.073.0
Interest Income​ (Expense)	( 35.7 )(35.7)	( 32.0 )(32.0)	( 30.5 )(30.5)	( 38.4 )(38.4)	( 39.8 )(39.8)
Pretax Income	28.028.0	5.95.9	17.917.9	19.419.4	33.233.2
Income Tax	( 9.8 )(9.8)	( 2.1 )(2.1)	( 6.3 )(6.3)	( 6.8 )(6.8)	( 11.6 )(11.6)
Net Income	18.218.2	3.83.8	11.611.6	12.612.6	21.621.6
Shares Outstanding​ (millions)	54.754.7	54.754.7	54.754.7	54.754.7	54.754.7
Earnings per Share	$ 0.33$0.33	$ 0.07$0.07	$ 0.21$0.21	$ 0.23$0.23	$ 0.39$0.39
Balance Sheet	20122012	20132013	20142014	20152015	20162016
Assets
Cash	49.449.4	68.268.2	85.685.6	77.677.6	84.184.1
Accounts Receivable	86.886.8	70.670.6	67.967.9	77.477.4	85.685.6
Inventory	33.133.1	29.229.2	30.330.3	33.333.3	34.634.6
Total Current Assets	169.3169.3	168.0168.0	183.8183.8	188.3188.3	204.3204.3
Net​ Property, Plant​ & Equipment	246.7246.7	243.6243.6	313.8313.8	341.5341.5	343.4343.4
Goodwill​ & Intangibles	361.2361.2	361.2361.2	361.2361.2	361.2361.2	361.2361.2
Total Assets	777.2777.2	772.8772.8	858.8858.8	891.0891.0	908.9908.9
Liabilities​ & Stockholders' Equity
Accounts Payable	19.519.5	17.517.5	21.121.1	25.325.3	29.929.9
Accrued Compensation	7.57.5	6.36.3	7.87.8	8.58.5	9.89.8
Total Current Liabilities	27.027.0	23.823.8	28.928.9	33.833.8	39.739.7
​Long-Term Debt	501.1501.1	501.1501.1	574.2574.2	601.1601.1	601.1601.1
Total Liabilities	528.1528.1	524.9524.9	603.1603.1	634.9634.9	640.8640.8
​Stockholders' Equity	249.1249.1	247.9247.9	255.7255.7	256.1256.1	268.1268.1
Total Liabilities​ & Stockholders' Equity	777.2777.2	772.8772.8	858.8858.8	891.0891.0	908.9908.9
Statement of Cash Flows	20122012	20132013	20142014	20152015	20162016
Net Income	18.218.2	3.83.8	11.611.6	12.612.6	21.621.6
Depreciation​ & Amortization	29.229.2	28.428.4	34.834.8	39.739.7	37.337.3
Change in Accounts Receivable	3.93.9	16.216.2	2.72.7	( 9.5 )(9.5)	( 8.2 )(8.2)
Change in Inventory	( 2.9 )(2.9)	3.93.9	( 1.1 )(1.1)	( 3.0 )(3.0)	( 1.3 )(1.3)
Change in Pay.​ & Accrued Comp.	2.82.8	( 3.2 )(3.2)	5.15.1	4.94.9	5.95.9
Cash from Operations	51.251.2	49.149.1	53.153.1	44.744.7	55.355.3
Capital Expenditures	( 25.2 )(25.2)	( 24.4 )(24.4)	( 102.9 )(102.9)	( 73.7 )(73.7)	( 41.8 )(41.8)
Cash from Investing Activ.	( 25.2 )(25.2)	( 24.4 )(24.4)	( 102.9 )(102.9)	( 73.7 )(73.7)	( 41.8 )(41.8)
Dividends Paid	( 5.9 )(5.9)	( 5.9 )(5.9)	( 5.9 )(5.9)	( 5.9 )(5.9)	( 7.0 )(7.0)
Sale​ (or Purchase) of Stock	​-	​-	​-	​-	​-
Debt Issuance​ (Pay Down)	​-	​-	73.173.1	26.926.9	​-
Cash from Financing Activ.	( 5.9 )(5.9)	( 5.9 )(5.9)	67.267.2	21.021.0	( 7.0 )(7.0)
Change in Cash	20.120.1	18.818.8	17.417.4	( 8.0 )(8.0)	6.56.5
Mydeco Stock Price	$ 7.46$7.46	$ 2.92$2.92	$ 5.49$5.49	$ 9.29$9.29	$ 12.71$12.71

PrintDone

a. By what percentage did​ Mydeco's revenues grow each year from

20132013

to

20162016​?

b. By what percentage did net income grow each​ year?

c. Why might the growth rates of revenues and net income​ differ?

Answer 1

Answer Answer (c) The reason behind the difference in the growth rates of revenue and net income is the fluctuation of expenses in every year which are adjusted in between the revenue and net income.