Sales revenue calculation for each year up to 9yrs

Can someone please tell me what sales revenue would be for the 9 years, itemised by year? Thanks

Didn't find your answer?

  • Sales for 9 year period
  • Yr 1 sales are £3,560,000
  • LFL sales growth in YR 2 of 5%
  • LFL sales growth in YR 3 to 9 is 2%
  • Discount factor of 10%

Replies (15)

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ALISK
By atleastisoundknowledgable...
12th Aug 2018 16:57

Any other homework you want doing?

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Replying to atleastisoundknowledgable...:
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By newcastlehay2603
12th Aug 2018 17:01

Ha - its actually not homework. I'm just struggling to work it through with the LFL Growth rate & discount factor applied. I'm happy to do one or the other but the two together have made me question myself.

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By newcastlehay2603
12th Aug 2018 17:14

This is what I came up with but totally unsure if correct....

Yr 1 3,560,000
Yr 2 3,397,842
Yr 3 3,150,411
Yr 4 2,920,998
Yr 5 2,708,291
Yr 6 2,511,073
Yr 7 2,328,217
Yr 8 2,158,676
Yr 9 2,001,481

Can anyone confirm?

Thanks

Thanks (0)
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By newcastlehay2603
12th Aug 2018 17:14

This is what I came up with but totally unsure if correct....

Yr 1 3,560,000
Yr 2 3,397,842
Yr 3 3,150,411
Yr 4 2,920,998
Yr 5 2,708,291
Yr 6 2,511,073
Yr 7 2,328,217
Yr 8 2,158,676
Yr 9 2,001,481

Can anyone confirm?

Thanks

Thanks (0)
Replying to newcastlehay2603:
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By paulwakefield1
13th Aug 2018 08:34

I get a very similar answer:

1 3,560,000
2 3,398,182
3 3,151,041
4 2,921,875
5 2,709,375
6 2,512,329
7 2,329,614
8 2,160,188
9 2,003,083

Thanks (1)
Replying to paulwakefield1:
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By Accountant A
13th Aug 2018 10:15

paulwakefield1 wrote:

I get a very similar answer:

Can't be bothered to put the numbers in a spreadsheet myself but I don't understand how it's possible to get two different answers to the question (when the answers are not rounded, etc.).

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Replying to Accountant A:
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By paulwakefield1
13th Aug 2018 10:40

Agreed but I can't be bothered to work out why. Mine was from a spreadsheet.

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Replying to Accountant A:
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By ATTServices
13th Aug 2018 10:54

Answers are rounded.

When calculating PV, if using a table the PV factor is rounded to 3 dp.

Thanks (2)
paddle steamer
By DJKL
13th Aug 2018 09:17

Not sure why you are all discounting, whilst the question gives a discount rate it does not ask for the discounted value of the sales, accordingly it might just be there to confuse the candidates as extraneous detail; remember always read the question.

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Replying to DJKL:
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By Accountant A
13th Aug 2018 10:16

DJKL wrote:

Not sure why you are all discounting,

Me either.

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Replying to DJKL:
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By paulwakefield1
13th Aug 2018 10:52

Well, in my case, because the OP asked. Could be a forecast, FRS 102 calculation or homework. Who cares?

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Replying to paulwakefield1:
paddle steamer
By DJKL
13th Aug 2018 11:14

"Can someone please tell me what sales revenue would be for the 9 years, itemised by year? Thanks"

The question is as above, that is my point, no request is made for NPV re the Sales Revenue, just the sales revenue is requested. The fact we are given a discount factor could be mere distraction.

At school I had a number of teachers constantly telling / yelling at me to always read the rubric, that is my point.

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Replying to DJKL:
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By paulwakefield1
13th Aug 2018 11:30

Take your point. But OP's second post showed he wanted to do both (rightly or wrongly).

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By newcastlehay2603
13th Aug 2018 11:30

Sorry all, my question wasn't the clearest as it's the first time I've used the forum and the character restriction wasn't ideal.

Thanks for those that have contributed.

To add some context/background, essentially I was theoretically looking at comparing 2x stores against each other, in order to work out which one represented the best opportunity (although I didn't stress this and did only state 'can you provide me with the sales number'.) As a result, discounting would be needed.

Thanks for your response Paul, I believe the difference we have was due to me using a DF table which is rounded to 3dp (correctly pointed out by another user - thanks!)

What I was struggling with, was the order of how to do it. What I did was to apply the growth rate to the previous year number then discount by 0.909, then the following year take that number you've just calculated, add the 2% LFL growth and then discount by a further 0.909. Ultimately, I wondered if this was the correct approach and based on your workings Paul, it seems to be?

Thanks again.

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By paulwakefield1
13th Aug 2018 12:59

Aritmetically there are different ways you can approach it but they all come out the same. Personally I would calculate the raw sales. i.e. apply the appropriate growth factor to each year to get the sequence of undiscounted sales and then calculate the discounting subsequently.

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