to forecast Msft's 2017 income (top line), we might use the prior years revenue growth rate (Rev2016/Rev2015), and multiply it times Rev 2016. (Forecasted Rev 2017 = (Rev 2016/Rev2015) times Rev 2016.) But, in this case, there was negative growth in revenues at Msft. So, to make a 2017 rev forecast, we might use an average of the past 3 or 5 years revenue growth? Alternatively, we might use our judgement (or use analysts forecast) and say, Im going to assume that Msfts future revenue will grow by x%. Thus, our forecast of Msfts Rev 2017 = Rev 2016 times (1+x).

Fiscal year ended June 30 Net income Diluted earnings per share Sin millions, except per share amounts) income 2015 as reported (GAAP) $93,580 $18,161 $12,193 $1.48 Impairment, integration, and restructuring charges 10,011 9,494 1.15 2015 as adjusted (non-GAAP) S93,580 $28,172 S21,687 $2.63 2016 as reported (GAAP) $85,320 $20,182 $16,798 $2.10 Net impact from Windows 10 revenue deferrals 6,643 6,643 4,635 0.58 Impairment, integration, and restructuring charges 1,110 895 0.11 2016 as adjusted (non-GAAP) $91,963 $27,935 S22,328 $2.79 Percentage change YY (GAAP) 11% 38% 42% Percentage change YY (non-GAAP) (2)% 3% 6%