Additionally, Tag-It's CEO has predicted a 12% increase in total revenue next year. Utilizing the percentage of sales method, prepare a forecast for next year in the correct section on the Excel spreadsheet. 1. The total revenue numbers over the past 4 years for Tag-It Corporation were as follows (values in millions): 73,785 69,495 o 75,356 o 71,879 2. Determine whether you think Tag-It can hit the target of a 12% increase in sales next year.
Additionally, Tag-It's CEO has predicted a 12% increase in total revenue next year. Utilizing the percentage of sales method, prepare a forecast for next year in the correct section on the Excel spreadsheet. 1. The total revenue numbers over the past 4 years for Tag-It Corporation were as follows (values in millions): 73,785 69,495 o 75,356 o 71,879 2. Determine whether you think Tag-It can hit the target of a 12% increase in sales next year.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:FINA310 IP TEMPLATE FOR STUDENTS
Student name:
Date:
ACTUAL
FORECAST
Current Year
Next Year
Total Revenue
71,879
|Cost of Revenue
(51,125)
Gross Profit
20,754
Operating Expenses:
Selling, General, and Administrative
(14,248)
Research and Development
Special Income/Other Charges
(2,194)
Total Operating Expenses
(16,442)
Operating Income
4,312
Net Interest Income
(666)
edite
Pre-Tax Income
3,646
Provision for Income Tax (19.5%)
(711)
Net Income
2,935
Additionally, Tag-It's CEO has predicted a 12% increase in total
revenue next year. Utilizing the percentage of sales method, prepare
a forecast for next year in the correct section on the Excel
spreadsheet.
1. The total revenue numbers over the past 4 years for Tag-lt
Corporation were as follows (values in millions):
o 73,785
O 69,495
o 75,356
o 71,879
2. Determine whether you think Tag-It can hit the target of a 12%
increase in sales next year.
Expert Solution
Introduction:
The "percentage of sales" method is a financial forecasting technique used by businesses to estimate their future revenue or expenses. This method involves calculating future revenue or expenses as a percentage of current or projected sales.
For example, if a company has projected sales of $1,000,000 and their historical expense-to-sales ratio is 10%, they would estimate their expenses for the upcoming period to be $100,000 (10% of $1,000,000).
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