a. By what percentage did Mydeco's revenues grow each year from 2013 to 2016?

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

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

 

  
 

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2012--2016 Financial Statement Data and Stock Price Data for Mydeco Corp. (All data as of fiscal year end; in $ millions) Income Statement 2012 2013 2014 2015 2016 Revenue 402.5 366.5 428.2 507.8 606.4 Cost of Goods Sold (185.4) (173.6) (202.2) (244.7) (289.6) Gross Profit 217.1 192.9 226.0 263.1 316.8 Sales and Marketing (68.5) (60.2) (67.2) (57.3) (84.2) (60.4) (101.4) (66.9) (118.1) (79.6) Administration Depreciation & Amortization (27.7) (28.1) (33.8) (36.6) (38.4) EBIT 60.7 40.3 47.6 58.2 80.7 Interest Income (Expense) (32.9) (31.4) (33.4) (35.9) (38.5) Pretax Income 27.8 8.9 14.2 22.3 42.2 Income Tax (9.7) (3.1) (5.0) (7.8) (14.8) Net Income 18.1 5.8 9.2 14.5 27.4 Shares Outstanding (millions) 53.3 53.3 53.3 53.3 53.3 Earnings per Share $0.34 $0.11 $0.17 $0.27 $0.51 Balance Sheet 2012 2013 2014 2015 2016 Assets Cash 49.3 77.0 94.3 88.5 102.6 Accounts Receivable 89.8 71.8 69.8 75.2 86.5 Inventory 31.9 30.4 29.6 30.8 33.7 Total Current Assets 171.0 179.2 193.7 194.5 222.8 2012--2016 Financial Statement Data and Stock Price Data for Mydeco Corp. (All data as of fiscal year end; in $ millions) Income Statement 2012 2013 2014 2015 2016 Revenue 402.5 366.5 428.2 507.8 606.4 Cost of Goods Sold (185.4) (173.6) (202.2) (244.7) (289.6) Gross Profit 217.1 192.9 226.0 263.1 316.8 Sales and Marketing (68.5) (60.2) (67.2) (57.3) (84.2) (60.4) (101.4) (66.9) (118.1) (79.6) Administration Depreciation & Amortization (27.7) (28.1) (33.8) (36.6) (38.4) EBIT 60.7 40.3 47.6 58.2 80.7 Interest Income (Expense) (32.9) (31.4) (33.4) (35.9) (38.5) Pretax Income 27.8 8.9 14.2 22.3 42.2 Income Tax (9.7) (3.1) (5.0) (7.8) (14.8) Net Income 18.1 5.8 9.2 14.5 27.4 Shares Outstanding (millions) 53.3 53.3 53.3 53.3 53.3 Earnings per Share $0.34 $0.11 $0.17 $0.27 $0.51 Balance Sheet 2012 2013 2014 2015 2016 Assets Cash 49.3 77.0 94.3 88.5 102.6 Accounts Receivable 89.8 71.8 69.8 75.2 86.5 Inventory 31.9 30.4 29.6 30.8 33.7 Total Current Assets 171.0 179.2 193.7 194.5 222.8