Question

Lantau Beer​ (A): European Sales. Lantau Beer is a Hong​ Kong-based brewery and files all of its financial statements in Hong Kong dollars​ (HK$). The​ company's European sales​ director, Phillipp​ Bosse, has been criticized for his performance. He​ disagrees, arguing that sales in Europe have grown steadily in recent years. Who is​ correct? 

Calculate the necessary variables for the analysis​ below:

	2010	2011	2012
Total net sales, HK$	172035	188228	244112
Percent of total sales from Europe	48%	45%	40%
Total European sales, HK$
Average exchange rate, HK$/€	11.51	12.19	10.68
Total European sales, euros
Growth rate of European sales

Answer 1

Below is the table showing evaluation of the following :

	2010	2011	2012
Total Net Sales ,HK$ (1)	172035	188228	244112
% of total Sales from Europe (2)	48%	45%	40%
Total European sales ,HK$ (3)=(1)*(2)	82576.80	84702.60	97644.80
Average Exchange Rate (4)	11.51	12.19	10.68
Total European Sales , Euros (5) = (4)/(3)	7174.353	6948.532	9142.772
Growth Rate in Europen Sales (Working Note )		-3.15%	31.58%

Growth rate in sales for 2011= (6948.532 - 7174.353) / 7174.353 = -3.15%

Growth rate in sales for 2012 = (9142.772 - 6948.532 ) / 6948.532 = 31.58%

The Sales Director is correct as although the sales have fallen for 2011 but it increased in 2012 resulting in increase of sales from 2010 to 2012.