a. By what percentage did Mydeco’s revenues grow each year from 2016 to 2019?

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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Table 2.5 Mydeco Corp. 2015-2019 Income Statement Revenue Cost of Goods Sold Gross profit Sales and Marketing Administration Depreciation & Amortization EBIT Interest Income (Expense) Pretax Income Income Tax Net Income Shares outstanding (millions) Earnings per share Balance Sheet Assets Cash Accounts Receivable Inventory Total Current Assets Net Property, Plant & Equip. Goodwill & Intangibles Liabilities & Stockholders' Equity Accounts Payable Accrued Compensation Current Liabilities Long-term Debt Total Liabilities Stockholders' Equity Total Liabilities & Stockholders' Equ Statement of Cash Flows Net Income Depreciation & Amortization Chg. In Accounts Receivable Chg. In Inventory Chg. In Payables & Accrued Comp Cash from Operations Capital Expenditures Cash from Investing Activities Dividends Paid Sale (or purchase) of stock Debt Issuance (Pay Down) Cash from Financing Activities Change in Cash Mydeco Stock Price 2015-2019 Financial Statement Data and Stock Price Data for Mydeco Corp. (All data as of fiscal year end; $ in millions) 2015 2016 404.3 363.8 -188.3 -173.8 190 -66.4 -59.1 216 -66.7 -60.6 -27.3 61.4 -33.7 27.7 -9.7 18 55 $0.33 2015 48.8 88.6 33.7 171.1 245.3 361.7 778.1 18.7 6.7 25.4 500 525.4 252.7 778.1 2015 18 27.3 3.9 -2.9 2.2 48.5 -25 -25 -5.4 0 0 -5.4 18.1 $7.92 -27 37.5 -32.9 4.6 -1.6 3 55 $0.05 2016 68.9 69.8 30.9 169.6 243.3 361.7 774.6 17.9 6.4 24.3 500 524.3 250.3 774.6 2016 3 27 18.8 2.8 -1.1 50.5 -25 -25 -5.4 0 0 -5.4 20.1 $3.30 2017 424.6 -206.2 218.4 -82.8 -59.4 -34.3 41.9 -32.2 9.7 -3.4 6.3 55 $0.11 2017 86.3 69.8 28.4 184.5 309 361.7 855.2 22 7 29 575 604 251.2 855.2 2017 6.3 34.3 0 2.5 4.7 47.8 -100 -100 -5.4 0 75 69.6 17.4 $5.25 2018 510.7 -246.8 263.9 -102.1 -66.4 -38.4 57 -37.4 19.6 -6.9 12.7 55 $0.23 2018 77.5 76.9 31.7 186.1 345.6 361.7 893.4 26.8 8.1 34.9 600 634.9 258.5 893.4 2018 12.7 38.4 -7.1 -3.3 5.9 46.6 -75 -75 -5.4 0 25 19.6 -8.8 $8.71 2019 604.1 -293.4 310.7 -120.8 -78.5 -38.6 72.8 -39.4 33.4 -11.7 21.7 55 $0.39 2019 85 86.1 35.3 206.4 347 361.7 915.1 31.7 9.7 41.4 600 641.4 273.7 915.1 2019 21.7 38.6 -9.2 -3.6 6.5 54 -40 -40 -6.5 0 0 -6.5 7.5 $10.89 Table 2.5 Mydeco Corp. 2015-2019 Income Statement Revenue Cost of Goods Sold Gross profit Sales and Marketing Administration Depreciation & Amortization EBIT Interest Income (Expense) Pretax Income Income Tax Net Income Shares outstanding (millions) Earnings per share Balance Sheet Assets Cash Accounts Receivable Inventory Total Current Assets Net Property, Plant & Equip. Goodwill & Intangibles Liabilities & Stockholders' Equity Accounts Payable Accrued Compensation Current Liabilities Long-term Debt Total Liabilities Stockholders' Equity Total Liabilities & Stockholders' Equ Statement of Cash Flows Net Income Depreciation & Amortization Chg. In Accounts Receivable Chg. In Inventory Chg. In Payables & Accrued Comp Cash from Operations Capital Expenditures Cash from Investing Activities Dividends Paid Sale (or purchase) of stock Debt Issuance (Pay Down) Cash from Financing Activities Change in Cash Mydeco Stock Price 2015-2019 Financial Statement Data and Stock Price Data for Mydeco Corp. (All data as of fiscal year end; $ in millions) 2015 2016 404.3 363.8 -188.3 -173.8 190 -66.4 -59.1 216 -66.7 -60.6 -27.3 61.4 -33.7 27.7 -9.7 18 55 $0.33 2015 48.8 88.6 33.7 171.1 245.3 361.7 778.1 18.7 6.7 25.4 500 525.4 252.7 778.1 2015 18 27.3 3.9 -2.9 2.2 48.5 -25 -25 -5.4 0 0 -5.4 18.1 $7.92 -27 37.5 -32.9 4.6 -1.6 3 55 $0.05 2016 68.9 69.8 30.9 169.6 243.3 361.7 774.6 17.9 6.4 24.3 500 524.3 250.3 774.6 2016 3 27 18.8 2.8 -1.1 50.5 -25 -25 -5.4 0 0 -5.4 20.1 $3.30 2017 424.6 -206.2 218.4 -82.8 -59.4 -34.3 41.9 -32.2 9.7 -3.4 6.3 55 $0.11 2017 86.3 69.8 28.4 184.5 309 361.7 855.2 22 7 29 575 604 251.2 855.2 2017 6.3 34.3 0 2.5 4.7 47.8 -100 -100 -5.4 0 75 69.6 17.4 $5.25 2018 510.7 -246.8 263.9 -102.1 -66.4 -38.4 57 -37.4 19.6 -6.9 12.7 55 $0.23 2018 77.5 76.9 31.7 186.1 345.6 361.7 893.4 26.8 8.1 34.9 600 634.9 258.5 893.4 2018 12.7 38.4 -7.1 -3.3 5.9 46.6 -75 -75 -5.4 0 25 19.6 -8.8 $8.71 2019 604.1 -293.4 310.7 -120.8 -78.5 -38.6 72.8 -39.4 33.4 -11.7 21.7 55 $0.39 2019 85 86.1 35.3 206.4 347 361.7 915.1 31.7 9.7 41.4 600 641.4 273.7 915.1 2019 21.7 38.6 -9.2 -3.6 6.5 54 -40 -40 -6.5 0 0 -6.5 7.5 $10.89

Answer rating: 100% (QA)

c Difference in Growth Rates The growth rates of revenues and net income might differ due to various ... View the full answer