Question

Grand Oaks Realty’s net revenue & net income for the following five-year period using 2015 as the base year, follow:

Requirement:

1. Compute a trend analysis for the net revenue & net income. Round to the nearest full percent.

2. Which grew faster during the period, net revenue or the net income?

Short answer

Answer

1. Given below

2. Net Income Increasing More as Compare to Revenue per year.

Step-by-step solution

Calculation of Trend % as per revenue

	2019 (a)	2018 (b)	2017 (c)	2016 (d)	2015 (e)
Net revenue	$1,360,000	$1,180,000	$1,147,000	$1,008,000	$1,044,000
Trend percent	130%	113%	110%	97%	100%
	(a/e)	(b/e)	(c/e)	(d/e)	(e/e)

Step 2:Calculation of Trend % as per income

	2019 (a)	2018 (b)	2017 (c)	2016 (d)	2015 (e)
Net income	127,000	120,000	87,000	75,000	83,000
Trend percent	153%	145%	105%	90%	100%
	(a/e)	(b/e)	(c/e)	(d/e)	(e/e)

Comment

Requirement 2

Net income grew faster as compared to net revenue.