C2 Use the assumptions described in the table when modeling items that are not computed as totals or subtotals Variable Modeling assumptions Revenue Annual revenue growth in the first forecast year equals the average annual revenue growth rate from the historical period and the revenue growth rate ...

To forecast the income statement items for 2022E through 2025E well use the provided assumptions and historical data Heres how we can approach each it ...

C2. Use the assumptions described in the table when modeling items that are not computed as totals

Fantastic news! We've Found the answer you've been seeking!

Question:

Income Statement Revenue Cost of goods sold Gross Profit SG&A and other indirect expenses Operating Profit

C2. Use the assumptions described in the table when modeling items that are not computed as totals or subtotals.

Variable	Modeling assumptions
Revenue	Annual revenue growth in the first forecast year equals the average annual revenue growth rate from the historical period and the revenue growth rate in each subsequent year is 1.74 percentage points higher than the growth rate from the previous year
Cost of goods sold	Cost of goods sold to revenue in each forecast year is 0.64 percentage points better than the average annual ratio from the last 2 years of the historical period
SG&A and other indirect expenses	SG&A and other indirect expenses in each forecast year equals the average annual ratio from the historical period
Taxes	The effective tax rate in each year of the forecast period equals the effective tax rate from the earliest year in the historical period
Dividends	Annual dividend growth in each forecast year is 5.84 percentage points greater than the average annual dividend growth rate from the historical period