Question

2019 Rounds Golf Fees F&B Sales Merchandise Sales COGS 2015 31,000 $930,000 $310,000 $150,000 62% 2016 29,000 $900,000 $300,000 $200,000 70% 2017 31,000 $1,000,000 $320,000 $230,000 65% 2018 33,000 $1,100,000 $350,000 $250,000 75% $350.000 Using a trend analysis from 2015 through 2018, predict the values for each category in 2019. (For each step in the equation, be sure to carry out to 3 decimal places, i.e. 1.003 or 0.222 and be sure to show your work.) 1. Rounds in 2019: a. 31,264 b. 33,759 38,543 d. 41,230 2. Golf Fees in 2019: a. $947,342 b. $995,686 C. $1,166,000 d. $1,297,354 3. F&B Sales in 2019: a. $365,050 b. $389,040 C. $412,156 d. $432,546 4. Merchandise Sales in 2019: a. $225,000 b. $245,695 C. $297,500 d. $312,657 5. COGS in 2019: a. 68.987% b. 72.425% C. 80.325% d. 94.365%

Answer 1

Trend analysis in general means to predict the direction in which the business is growing or moving forward with. It is a commonly used practice of collating the available data and searching for a pattern.

In this case, for the base year we take it as 2015 for calcualtion of the trend analysis.

Disclaimer: Exact values as given in the options are not predictable in this specific case and questions followed.

Trend % value = value in the current year / value in base year (2015)

A1: Rounds in 2019:

Trend % is given by

For 2016: 29000/31000 = 93.548%

For 2017: = 31000/31000 = 100%

For 2018: = 33000/31000 = 106.451%

We see a growth of 6.45% every year from 2016 through 2018 through trend analysis. So, rounds in 2019 is given by (106.45 + 6.45)% of 31000 = 35000.

A2: Golf fees in 2019:

For 2016: 900000/930000 = 96.774%

For 2017: = 1000000/930000 = 107.526%

For 2018: = 1100000/930000 = 118.279%

We see a growth of 10.753% every year from 2016 through 2018 through trend analysis. So, golf fees in 2019 is given by (118.279 + 10.753)% of 9300000 = 11999.976.

A3: F&B Sales in 2019:

For 2016: 300000/310000 = 96.774%

For 2017: = 320000/310000 = 103.226%

For 2018: = 350000/310000 = 112.903%

In this case, we see a changing pattern that is increasing by 3.226% every year (100 - 96.774) = 3.226% (103.226 - .96.774) = 6.452% & (112.903 - 103.226) = 9.677%

F&B Sales in 2019 will be (112.903 + 9.677 + 3.226)% of 310000 i.e, $38999.860

A4: Merchandise Sales in 2019:

For 2016: 200000/150000 = 133.333%

For 2017: = 230000/150000 = 153.333%

For 2018: = 250000/150000 = 166..666%

The pattern heres is a increase by falling trend (133.33 3- 100) = 33.33% (153.333 - 133.333) = 20% (166.666 - 133.333) = 13.333%

Which implies that fall in growth is decreasing by half every time. In 2019 it will be half of (20%-13.333%) = 3.333%

2019 merchandise sales will be [166.666 +(13.333 - 3.333)]% of $150000 i.e, $26499.99