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# MKT 100 W12 Metrics Worksheet Percent Change answers.doc

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School
Ryerson University
Department
Marketing
Course
MKT 100
Professor
Armand Gervais
Semester
Fall

Description
Worksheet: Metric 2 Percentage Change 1) Ed’s is a small deli, which has had great success in its second year of operation. Revenues in Year 2 are \$570,000, compared with \$380,000 in Year 1. What is Ed’s year-over-year sales growth rate? Answer: Year-over-Year Sales Growth = (Year 2 – Year 1) / Year 1 * 100% = (\$570,000 - \$380,000) / \$380,000 * 100% = 50% 2) A pair of jeans that normally sells for \$75 is marked down 30% and then reduced at the cash register another 10%? Is this a total reduction of 40%? If not, what is the percent reduction? Answer: Let Price 1 be the initial price of \$75, let Price 2 be the price after the 30% mark down, and Price 3 be the price after additional 10% reduction at the cash register. Initial Reduction = -30% = (Price 2 – Price 1) / Price 1 -0.3 = (Price 2 - \$75) / \$75 -0.3 * \$75 = Price 2 - \$75 Price 2 = -0.3 * \$75 + \$75 = \$52.50 Second Reduction = -10% = (Price 3 – Price 2) / Price 2 -0.1 = (Price 3 - \$52.50) / \$52.50 -0.1 * \$52.50 = Price 3 - \$52.50 Price 3 = -0.1 * \$52.50 + \$52.50 = \$47.25 Total Percent Reduction = (Price 3 – Price 1) / Price 1 * 100% = (\$47.25 - \$75) / \$75 * 100% = 37% 3) A small retain chain posts impressive percentage growth figures, moving from \$58 million to \$107 million in sales from one year to the next. Despite this dynamic growth, however, analysts cast doubt on the firm’s business model, warning that its existing stores’ growth measure suggests that its concept is failing. Based on the chart below, and assuming that stores were opened on the first day of Years 1 and 2: What is the retail chain’s year-over-year sales growth rate? What is the year-over-year sales growth or decrease for each store, as appropriate? What is the same store (existing and not expansion) year-over-year
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