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Hi Sir
My question is related to part a that how the annual sales average growth comes out to be 14%
thanxIt is not the annual sales growth but the average growth per quarter.
If it was growing on average at g per quarter, then after 1 quarter (i.e. by quarter 2) it would have grown from 40 to 40x(1+g).
After 2 quarters (i.e. by quarter 3) it would have grown to 40 x (1+g)^2
After 3 quarters (i.e. but quarter 4) it would have grown to 40 x (1+g)^3It has in fact grown to 60 by quarter 4, and so 40 x (1+g)^3 = 60.
If you solve this, then g = 0.14 or 14%
However, it is not the exact number that is important. What is important is that the growth in revenue over the year has been impressive!
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