# Case Study: Rate Of Sales Growth In 2007

Submitted By LucianZ1
Words: 364
Pages: 2

Q1:
Rate of sales growth in 2007 = ((current year's sales - last year's sales)/last year's sales)x100
= ((3,814,000-3,051,000)/3,051,000)*100 = 25.01%
So, the forecasted sales are 2008 2009 2010
(1+25.01%)*3,814,000=4,767,881 (1+25.01%)*4,767,881=5,960,328 (1+25.01%)* 5,960,329=7,451,007

Q2:
Net income growth in 2007 = ((current year's net income - last year's net income)/last year's net income)x100 = ((1,150,000 – 766,000)/766,000)*100 = 50.13%
So, the forecasted sales are 2008 2009 2010
(1+50.13%)*1,150,000=1,726,495 1,726495*(1+50.13%)=2,591,987 2,591,987*(1+50.13%)=3,891,349
The projected net income is growing faster than projected sales. However, compared to the 2008 data, net sales grow faster than net income.
Q3:
Pharmacia has a larger number of current ratio, which means it has more current asset compared to its current liability. However, Chem-Med has more liability in percentage. Compared to the industry average, it has a larger current ratio, which means the percentage of current asset is beyond industry average.
2010 current ratio = 3,261,000/1,647,000 = 1.98
Chem-Med is facing a problem of liability increase.

Q4:
Debt-to-assets ratio: Total Liability/total asset.
2007 614,000/4,491,000 = 0.1367
2008 857,000/6,343,000 = 0.1351
2009 1,212,000/8,641,000 = 0.1402
2010 1,664,000/11,995,000 = 0.1387
The ratio is pretty stable, fluctuating around