8.6 Forecasting Solution
Provide some interpretive statements or comments about this company’s (or investment project’s) prospects. Specifically, calculate the growth rates for each year versus its prior year – for GP, EBIT, and NI.
The Growth Rate is calculated as: (Next Year’s Number ÷ Last Year’s number) – 1.
For example, how much higher, in percentage terms, is the GP for “Year 1” in comparison to “Last Year”? Do this for each year until you get to Five versus (or “over”) Four. Use four decimal places throughout. What do you find and why?