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Hello Kim,
For revenue, which is forecast to increase by a significant amount (e.g. 11·8% increase comparing the six months ending 31 March 2019 and 31 March 2020), consider whether the forecast appears overly optimistic. For instance, there is not a corresponding increase in marketing costs to support the forecast increase in revenue.
I do not understand why there is not a corresponding increase in marketing costs to support the forecast increase in revenue.
The maketing cost is $1000 for 6 months to 31/03/2019 and $1100 for 6 months to 31/03/2020, indicating 10% increase comparing the six months ending 31 March 2019 and 31 March 2020.
As such, we have 11.8% increase in revenue, and 10% increase in marketing costs comparing the six months ending 31 March 2019 and 31 March 2020. Although the increase in marketing costs is slightly lower than the increase in revenue, I would say increase in marketing cost is consistent with increase in revenue.
Please correct me if I am wrong. Thank you.
Regards,
MarthewThe answer is only suggesting that it would “appear overly optimistic” IF there is not a corresponding increase. That you then determine that there is a commensurate increase in marketing means you can conclude that the increase does not appear overly optimistic for this reason. (But you can also see that although marketing increases by 100k in the 6 months to Sept 19 that revenue actually fell – and that although there is then no increase in the 6 months to 31 Mar 20, the revenue for that 6 months increases by 38%.)
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