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from Kaplan study text, test yrour understanding 6:
how can we calculate Share?
as per my understanding and as per Bpp book it is calculated as follow:
last year market size – first year market size / first year market size
means we consider change in market size to calculate Share.however there is note at KAPLAN study text says:
Note: if market revenue is given for a number of successive years the average??
this means calculation differes if we have only 2 years or more??
as per KPLAN the growth is calculated as follow:
Market growth = the % increase/decrease in annual market revenue
% increase/decrease in annual market revenue can be calculated as follows:1 + g = n?most recent market revenue ÷ ealiest market revenue
where g = the increase/decrease in annual market revenue as a decimal
n = the number of periods of growth
can any 1 help me with this?
Let’s say that market size is 100, 120 and 140 in three successive years. ou have a choice as to how to estimate growth rate:
Last two years only: 120(1 +g) = 140
140/120 = 1.167 , g = 0.167 or 16.7%
Or all three years 100 x (1+ g)(1 + g) = 140
(1 +g)(1 + g) = 140/100 = 1.4
1+g = Square root(1.40) = 1.183
g = 0.183 = 18.3%The second method takes more years into account so might give a better estimate of market growth rate. However, the first method takes only the latest years into account so might give a more up-do date growth rate.
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@gromit thank you very much I was suffering on this
I have the same problem . In this case given 4 yrs . Market size (180, 210, 260, 275;,310 respectively) sales revenue ( 10; 12; 18; 25; 30) . Question says calculate Market growth , relative market share .i get different answers from whats shown in the kaplan study text. Please assist
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