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See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. By what

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See Table 2.5 showing financial statement data and stock price data for Mydeco Corp.
a. By what percentage did Mydeco€™s revenues grow each year from 2010 to 2013?
b. By what percentage did net income grow each year?
c. Why might the growth rates of revenues and net income differ?

See Table 2.5 showing financial statement data and stock price


Table continue

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TABLE 2.5 2009-2013 Financial Statement Data and Stock Price Data for Mydeco Corp Mydeco Corp. 2009-2013 Statement of Cash Flows Net Income Depreciation & Amortization Chg. in Accounts Receivable Chg. in Inventory Chg. in Payables & Accrued Com (All data as of fiscal year end; in S million) 2009 18.0 27.3 2010 3.0 27.0 18.8 2.8 2011 2012 12.7 38.4 2013 21.7 38.6 6.3 34.3 (0.0) 2.5 4.7 47.8 (25.0) (25.0 (100.0) (75.0) 40.0) (25.0) (25.0 (100.0 (75.0) 40.0) (5.4) (2.9) 2.2 48.5 (3.3) 5.9 46.6 3.6) 6.5 54.0 Cash from Operations Capital Expenditures 50.5 Dividends Paid Sale (or purchase) of stock (5.4) (5.4) (5.4) 6.5) Cash from Financing Activities Change in Cash Mydeco Stock Price 75.0 69.6 17.4 $7.92 $3.30 $5.25 $8.71 $10.89 25.0 19.6 (8.8) (5.4) 18.1 (5.4) 20.1 (6.5) 7.5

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c Net Income growth rate differs from revenue growth rate because cost of goods sold an...View the full answer


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Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.

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