Question

Ash Company reported sales of $430,000 for Year 1, $480,000 for Year 2, and $530,000 for Year 3. Using Year 1 as the base year, what is the revenue trend percent for Years 2 and 3?

Answer 1

Answer:

Year 2 = 11.63%

Year 3 = 23.26%

Explanation:

Using year 1 as the base year, the trend percent for each subsequent year is calculated based on reported sales of $430,000.

For Year 2 with sales of $480,000:

$T_2=\frac{\ 480,000-\ 430,000}{\ 430,000}=0.1163\\T_2=11.63\%$

For Year 3 with sales of $530,000:

$T_3=\frac{\ 530,000-\ 430,000}{\ 430,000}=0.2326\\T_3=23.26\%$