Tuesday, November 3, 2009

natural business year


A 12-month year that ends during a time when a firm's business is at a natural low point। For example a toy manufacturer has a natural year that ends in February or March, when the busy holiday season is over.


The blue is 25% growth per year, whereas the pink is if you had 25% growth each year based on the starting year, so say $100 million the first year, $125 million, then $150 million and so on. By the 5th year you have $305 million with 25% growth and only $225 million with the plan to increase the business by a fixed amount each of the next five years. For that last year with a 25% growth rate you need to increase the business by about $60 million verse $25 million.


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