1) What was the compound (average) annual growth in sales from 2013 to 2016?

2) Prepare a pro forma income statement for 2017 using the percent-of-sales method. Assume that sales grow at the same rate as in the past. What is the expected net income (not sales)?

Problem 2 Intro Rakuten had the following sales in the past: Year 2013 2014 2015 2016 Sales ($ million) 595 555.85 705.19 665.44 Income statement for 2016: Line item Sales - COGS = Gross profit - SG&A - Depreciation = Operating profit - Interest = Taxable income - Taxes = Net income Amount ($ million) 665.44 266.18 399.26 133.09 66.54 199.63 75 124.63 34.9 89.74 Interest expenses and the average tax rate are expected to stay constant