Question

Please show in excel with formulas

In your position as research assistant to a portfolio manager, you need to analyze the profitability of the companies in the portfolio. Using the data for 3M Co. below: 2. 2013 2012 2011 2010 2009 Fiscal Year Total Revenue 30,871 29,904 29,611 26,662 23,123 Net Income 4,659 4,444 4,283 4,085 3,193 a. Calculate the net profit margin for each yean b. Calculate the average annual growth rates for revenue and net income using the GEOMEAN function. Is net income growing more slowly or faster than total revenue? Is this a positive for your investment in the company? Calculate the average annual growth rate of total revenue using the AVERAGE function. Is this result more or less accurate than your result in the previous question? Why? Create a Column chart of total revenue and net income. Be sure to c. d. change the chart so that the x-axis labels contain the year numbers, and format the axis so that 2013 is on the far right side of the axis.

Answer 1

Please note the following before you look into the solution:

1. I have reversed the sequence of data to read from the year 2009 to year 2013.
2. The solution is split across four pictures:
   1. First picture shows the formula used in all the cells
   2. Second and third picture show the output in each cell
   3. Fourth picture is the graph
3. After typing the formula,please change the format to "Percentage %" so that all your growth rates are in %age terms.

Please see the solution below now:

2009 20112012 29,6 Year Revenue Net Income Part (a) Net profit margin Net income / Revenue 2010 26,662 4,085 23,123 3,193 1129,904 30,871 4,4444,659 4,283 13.81% 15.32% 14.46% 14.86% 15.09% Part(b) Annual growth rate in revenue 1 +growth rate 15.31% 115.31%| 11.06% 111.06%) 0.99%) 100.99%, 3.23% 103.23% D Average annual growth rate in revenue using GEOMEAN 7.49% Annual growth rate in net income 3 1 +growth rate 27.94% 127.94%) 4.85% 104.85% 3.76%) 103.76% 4.84% 104.84% 2 9.91% Average annual growth rate in net income using GEOMEAN 5 6 Net income is growing at a rate faster than the revenue. It is positive for my investment in the company Because Net income belongs to the shareholder. A higher growth rate there will be much appreciated by 8 the shareholders