See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. By what
Question:
a. By what percentage did Mydecos revenues grow each year from 2010 to 2013?
b. By what percentage did net income grow each year?
c. Why might the growth rates of revenues and net income differ?
Table continue
TABLE 2.5 2009-2013 Financial Statement Data and Stock Price Data for Mydeco Corp Mydeco Corp. 2009-2013 Statement of Cash Flows Net Income Depreciation & Amortization Chg. in Accounts Receivable Chg. in Inventory Chg. in Payables & Accrued Com (All data as of fiscal year end; in S million) 2009 18.0 27.3 2010 3.0 27.0 18.8 2.8 2011 2012 12.7 38.4 2013 21.7 38.6 6.3 34.3 (0.0) 2.5 4.7 47.8 (25.0) (25.0 (100.0) (75.0) 40.0) (25.0) (25.0 (100.0 (75.0) 40.0) (5.4) (2.9) 2.2 48.5 (3.3) 5.9 46.6 3.6) 6.5 54.0 Cash from Operations Capital Expenditures 50.5 Dividends Paid Sale (or purchase) of stock (5.4) (5.4) (5.4) 6.5) Cash from Financing Activities Change in Cash Mydeco Stock Price 75.0 69.6 17.4 $7.92 $3.30 $5.25 $8.71 $10.89 25.0 19.6 (8.8) (5.4) 18.1 (5.4) 20.1 (6.5) 7.5
Step by Step Answer:
c Net Income growth rate differs from revenue growth rate because cost of goods sold an...View the full answer
Related Video
Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.
Students also viewed these Corporate Finance questions
-
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. In what year was Mydecos net income the lowest? b. In what year did Mydeco need to reduce its cash reserves? c....
-
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. Compute Mydecos PE ratio each year from 2009 to 2013. In which year was it the highest? b. What was Mydecos...
-
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. What is Mydecos market capitalization at the end of each year? b. What is Mydecos market-to-book ratio at the...
-
Chunky Cheese Pizza has $60 million in bonds payable. The bond indenture states that the debt to equity ratio cannot exceed 3.0. Chunky's total assets are $200 million, and its liabilities other than...
-
The put-call parity rule can be expressed as C - P = [f0(T) - X] (1 + r) - T. Consider the following data: f0(T) = 102, X = 100, r = 0.1, T = 0.25, C = 4, and P = 1.75. A few calculations will show...
-
Let \(\left(\mathcal{C}_{(\mathrm{o})}, \mathscr{B}\left(\mathcal{C}_{(\mathrm{o})} ight), \mu ight)\) be the canonical Wiener space (we assume \(d=1\) ). We will now consider the space...
-
What is dividend?
-
Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2011, Lacy received the following information: The expected long-term rate of return on plan assets was 10%....
-
The graph below is a market demand curve for steaks. $8 A $6 B D C $4 E 0 3 6 Q (Million) a. Clearly label the consumer surplus associated with a market price of $6 using the letters on the graph...
-
Vosges Haut-Chocolat is a chocolate brand seeking to make consumption of their chocolate a luxury experience which has grown along with the market for high-end chocolate. The video discusses how...
-
Find online the annual 10-K report for Peets Coffee and Tea (PEET) for fiscal year 2011 (filed in January 2012). Answer the following questions from their income statement: a. What were Peets...
-
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. Suppose Mydeco repurchases 2 million shares each year from 2010 to 2013. What would its earnings per share be in...
-
The sole question presented in this case is which of several claimants is entitled to an award for information leading to the apprehension and conviction of certain bank robbers. * * * On June 12th...
-
What are the four stages in establishing an activity-based costing system?
-
What are the value-creation and value-capture mechanisms that Amazon uses in its business model? How consistent are these with its value proposition?
-
A company operates a standard absorption costing system and absorbs fixed production overheads based on machine hours. The budgeted fixed production overheads for the company for the previous year...
-
Using a supply-and-demand graph and assuming competitive markets, show and explain the effect on equilibrium price and quantity of the following: (a) A technological change that reduces the cost of...
-
A company manufactures golf bags. Golf bags have the following manufacturing costs: Required Prepare a statement of total product cost for a batch of 5,000 golf bags which shows prime cost and...
-
An investor has a portfolio consisting of 100 put options on stock A, with a strike price of 40, and 5 shares of stock A. The investor can write put options on stock A with a strike price of 35. The...
-
(a) As Section 17.3 discusses, high-frequency sound waves exhibit less diffraction than low-frequency sound waves do. However, even high-frequency sound waves exhibit much more diffraction under...
-
The ECB report stated on 2006: Despite the overall increase in euro area long term bond yields, the euro area yield curve flattened in 2006. This is reflected in a corresponding decline of the term...
-
Assume perfect capital markets. Kay Industries currently has $100 million invested in short-term Treasury securities paying 7%, and it pays out the interest payments on these securities as a...
-
Redo Problem 11, but assume that Kay must pay a corporate tax rate of 35%, and that investors pay no taxes.
-
What would AMCs share price be after the repurchase if its enterprise value goes up? What would AMCs share price be after the repurchase if its enterprise value declines?
-
Consider the following equation. -2d+16=2(d+8) - 4d Solve the equation. d The solution set is 0. The solution set is {d | d is a real number}. Classify the equation as either an identity, consistent...
-
What innovative approaches can organizations employ to reconcile competing demands for capital investment and operational expenditure within the constraints of finite budgetary resources, while still...
-
What measures can organizations implement to promote transparency and accountability in the budgeting process, thereby fostering trust and buy-in among stakeholders and facilitating...
Study smarter with the SolutionInn App