Question

What is the average increase in % in each of the in each catergories below? Historical...

What is the average increase in % in each of the in each catergories below?

Historical Data 2016 2017 2018 2019 2020 % increase
Sales 769,216 811,821 819,171 947,420 1,066,002
Cost of Pairs Sold 402,731 418,605 437,655 449,655 491,806
Gross Margin 366,485 393,216 381,516 497,765 574,196
Expenses:
Warehouse 38,257 43,288 48,302 54,839 58,103
Marketing 109,856 110,623 114,118 161,736 166,079
Admin 19,650 21,366 21,629 21,699 21,768
Total Expenses 167,763 175,277 184,049 238,274 245,950
Operating Profit 198,722 217,939 167,467 259,801 328,246
Interest Income 2,556 14,319 10,187 3,742 4,440
Other Income 0 0 0
Pre-tax Profit 196,166 203,620 157,280 256,059 323,806
Income Tax 58,850 61,086 47,184 76,818 97,142
Net Profit 137,316 142,534 110,096 179,241 226,664
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Answer #1

Average increase in sales : 1066002 = 769216 * (1+r)4 where r is the average annual increase. Solving we get r = 8.50%

Using the same formula for other items:

Cost of pairs sold : (491806/402731)1/4 - 1 = 5.12%

Gross margin : (574196/366485)1/4 - 1 = 11.88%

Warehouse : (58103/38257)1/4 - 1 = 11.01%

Marketing : (166079/109856)1/4 - 1 = 10.88%

Admin : (21768/19650)1/4 - 1 = 2.59%

Total Expenses : (245950/167763)1/4 - 1 = 10.04%

Operating profit : (328246/198722)1/4 - 1 = 13.37%

Interest Income : (4440/2556)1/4 - 1 = 14.80%

Other Income : 0

Pretax Profit : (323806/196166)1/4 - 1 = 13.35%

Income Tax : (97142/58850)1/4 - 1 = 13.35%

Net Profit : (226664/137316)1/4 - 1 = 13.35%

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