Following are 2017 and 2018 revenue data for Honeywell Internationals four segments. Use these data to forecast
Question:
Following are 2017 and 2018 revenue data for Honeywell International’s four segments. Use these data to forecast its 2019 revenue.
Honeywell International Segment Sales and Business-Unit Sales by Segment | ||
---|---|---|
$ millions | 2018 | 2017 |
Aerospace sales | ||
Commercial aviation original equipment | $3,591 | $2,475 |
Commercial aviation aftermarket | 5,373 | 5,861 |
Defense and space | 5,423 | 4,053 |
Transportation systems | 2,622 | 3,906 |
Total aerospace sales | $17,009 | $16,295 |
Honeywell building technologies sales | ||
Homes | $4,686 | $4,482 |
Buildings | 5,370 | 6,053 |
Total Honeywell building technologies sales | $10,056 | $10,535 |
Performance materials and technologies sales | ||
UOP Russell LLP | $3,603 | $2,753 |
Process solutions | 4,981 | 5,553 |
Advanced materials | 3,606 | 2,791 |
Total performance materials and technologies sales | $12,190 | $11,097 |
Safety and productivity solutions sales | ||
Safety | $2,278 | $2,927 |
Productivity solutions | 4,817 | 3,470 |
Total safety and productivity solutions sales | $7,095 | $6,397 |
Total consolidated sales | $46,350 | $44,324 |
a. Calculate historic (year-on-year) sales growth for each business unit, segment, and total consolidated sales.
Honeywell International Segment Sales and Business-Unit Sales by Segment | 2017 to 2018 | |
---|---|---|
$ millions | % growth | |
Aerospace sales | ||
Commercial aviation original equipment | ||
Commercial aviation aftermarket | ||
Defense and space | ||
Transportation systems | ||
Total aerospace sales | ||
Honeywell building technologies sales | ||
Homes | ||
Buildings | ||
Total Honeywell building technologies sales | ||
Performance materials and technologies sales | ||
UOP Russell LLP | ||
Process solutions | ||
Advanced materials | ||
Total performance materials and technologies sales | ||
Safety and productivity solutions sales | ||
Safety | ||
Productivity solutions | ||
Total safety and productivity solutions sales | ||
Total consolidated sales |
b. Use the historic growth in Total consolidated sales (from 2017 to 2018) calculated in Part a to estimate total consolidated sales for 2019.
Estimated total consolidated sales for 2019 |
c. Refine the sales forecast by using the sales growth rates for each of the four segments (from 2017 to 2018) calculated in part a to estimate 2019 sales for each segment. Determine a forecast for total consolidated sales for 2019.
Estimated total consolidated sales for 2019 |
d. Refine the sales forecast further by using the sales growth rates for each of the business units within each of the four segments. This means we use the separate historic growth for each line item in the table (calculated in part a) to estimate 2019 total consolidated sales.
Estimated total consolidated sales for 2019 |
e. Which approach do we believe is more accurate in forecasting total consolidated sales?
Introduction to Managerial Accounting
ISBN: 978-1259105708
5th Canadian edition
Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan