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DISC 112: Assignment 3

Lab section 2 (2:30 pm 5:20 pm)
Roll no.: _______________________ Date: 9 February 2017

Download the excel file Financials to complete this assignment.

Save the downloaded file in D Drive and name it after your roll number (e.g.
2011001).
This assignment can be completed in groups but must be submitted individually.
The assignment is divided into four parts.
The total marks for the assignment are 30.
Description of the data set:

The file Financials contains information regarding the industry outlook and the
profitability of My Microsystems Company. The data covers the time period of 10 years
starting from the year 2007.

Assignment instructions:

Preliminary task:

Create a new worksheet and name it My Profile. Provide the information regarding your
name, roll number, group number and roll numbers of your group members in the newly
created worksheet:

The filled cells of the worksheet should look like the following:

There are no marks allocated to the preliminary task. However, if the preliminary task is not
correctly done there will a penalty of 5 marks from the assignment total marks.
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Part A: (Total Marks:5)

Go to the worksheet titled Industry outlook and perform the following tasks:

1. Complete the series of year from 2007 to 2016 in column C. 0.5

2. Compute the total industry growth (Software, Hardware and Storage) for each of the 1
10 years from 2007 to 2016. Report the numbers in the last column (column G) of
the table (refer to image below)

3. Compute the maximum growth rate experienced by each of the hardware, software
and storage sectors of the industry. Also compute the maximum growth rate for the
entire industry. Enter your data as shown in the image below. Maximum growth rate
must appear in 15th row of worksheet.

4. Compute the minimum growth rate experienced by each of the hardware, software 0.5
and storage sectors of the industry. Also compute the minimum growth rate for the
entire industry. Enter your data as shown in the image below. Minimum growth rate
must appear in 16th row of worksheet

5. Compute the average growth rate experienced by each of the hardware, software 1
and storage sectors of the industry over past 10 years. Also compute the average
growth rate experienced by the entire industry. Enter your data as shown in the
image below. Average growth rate must appear in 17th row of worksheet

6. Convert the number format for all the growth figures into percentages and express 0.5
the percentages up to 1 decimal point.

7. Format the industry average growth rate table such that the font style is Times New 1
Roman and font size is 12. The cells should be bordered as demonstrated in the
image below. Note that all cells are not bordered. The cells which contain computed
numbers along with their headers/titles should have gray background (refer to the
image below). Note: your numbers will be different from the examples in the
images.
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After completing part A, the relevant worksheet must appear as the image below:

Part B: (Total Marks: 5)

Go to the worksheet titled Company outlook and perform the following tasks:

Note: All cells with green fill must be filled while doing this part of assignment and their
color must be removed.
1. Compute gross profit for each of the 10 years. Gross profit for each year should 1
appear in cell at cross section of 5th row and the column representing that particular
year.

Gross Profit = Net Revenue Cost of Sales

2. Compute total operating expenses for each of the 10 years. Total operating 1
expenses for each year should appear in cell at cross section of 10th row and the
column representing that particular year.

Total Operating expenses = Selling, General & Administrative Expense + Research &
Development Expense + Other operating expense

3. Compute operating income for each of the 10 years. Operating income for each year 1
should appear in cell at cross section of 12th row and the column representing that
particular year.

Operating income=Gross profit - operating income

4. - Insert a title Income statement for the years 2007-2016 in an inserted top row 0.5
of the worksheet and format it as Heading3 cell style.
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- Format the second row containing years to themed cell style 40% Accent5.

5. Format all the numbers (revenue, expenses, profit, income) to number format w/ 0.5
comma and without decimals. The year e.g 2015 should not have comma inserted.

6. - The row containing total operating expenses should be formatted according to 0.5
calculations cell style.
- The rows containing gross profit and operating income should be formatted
according to output cell style.
Suggestion: Refer to the cell styles in styles group in the home ribbon tab.

7. Font style of the worksheet should be Arial and font size should be 13. 0.5

After completing part B, the relevant worksheet must appear as the image below:
Note: the image is indicative and the numbers may not match the original numbers
in your file

Part C: (Total Marks: 9)

Go to the worksheet titled Profitability ratios and perform the following tasks:

1. Transpose the cells containing year (2007-2016) in second row on the worksheet 0.5
Company Outlook to the column B in the worksheet Profitability ratios.

Suggestion: You may want to use paste special.

2. Transpose the cells containing Net Revenue in 4th row from the worksheet 1
Company Outlook to the column C in the worksheet Profitability ratios.

Suggestion: You may want to use paste special.

3. Transpose the cells containing Gross profit in 6th row from the worksheet Company 0.5
Outlook to the column D in the worksheet Profitability ratios.

Suggestion: You may want to use paste special.

4. Transpose the cells containing Operating Income in 13th row from the worksheet 0.5
Company Outlook to the column E in the worksheet Profitability ratios.
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Suggestion: You may want to use paste special.

5. Compute Gross Margin and report the output in column F of the worksheet 2
Profitability ratios.

Gross Margin= Gross Profit /Net revenue

Full credit can only be obtained if referenced formulae are used in all cells.

6. Compute Operating Income Margin and report the output in column G of the 2
worksheet Profitability ratios.

Operating Income Margin= Operating Income /Net revenue

Full credit can only be obtained if referenced formulae are used in all cells.

7. Apply conditional formatting such that data bars reflect different levels of gross 2
margin and operating income margin. (Refer to the expected output image below).

8. Format the top row containing the column headers as Heading2 heading style. 0.5

Border the cells as shown in the image below.

After completing part C, the relevant worksheet must appear as the image below:
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Part D: (Total Marks: 11)

In this part of the assignment you are required to forecast operating income in next four
years based on the expected growth rates (mentioned in steps below) of revenues and
expenses.
Go to the worksheet titled Forecasting and perform the following tasks:

1. The growth of net revenue is based on average total industry growth rate of last four 1
years. Select cell F3 and in this cell enter the formula to compute the average
industry growth rate for last four years (from 2013 to 2016). Change the
background fill of the cell to light orange as of the surrounding cells. Express your
answer in percentage terms.

Suggestion: You may need to refer to cells G5 to G8 from the worksheet Industry
Outlook in your formula.

Full credit can only be obtained if referenced formulae are used in all cells.

2. Net revenue is expected to increase by the last four year industry average growth 1
rate for each of the successive years (from 2017- 2020). The percentage by which
revenue is expected to increase in next four years is calculated in step 1 above. Select
cell D16 and enter the formula to compute the forecasted net revenue for 2017.

Example: If the revenue for 2016 is 20,000 and last four year average growth rate of
industry comes out to be 5%. The forecasted net revenue for 2017 should be 21,000
i.e. 20,000 *(1+5%).

Note: You have computed last four year average growth rate of industry in step 1
above. You should use the output of step 1 in the calculation required in this step.

Full credit can only be obtained if referenced formulae are used in all cells.

3. Repeat step 2 above to forecast the net revenue for years 2018-2020. 1

It is important to note that each years forecast is based on previous years net
revenue.

Full credit can only be obtained if referenced formulae are used in all cells.

4. The cost of sales are expected to increase by 3% in each of the years. Select cell D17 1
and enter the formula to compute the forecasted cost of sales for 2017.

Example: If the cost of sales for 2016 is 9,000. The forecasted net revenue for 2017
should be 9,270 i.e. 9,000 *(1+3%).

Full credit can only be obtained if referenced formulae are used in all cells.

5. Repeat step 4 above to forecast the cost of sales for years 2018-2020. 2
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It is important to note that each years forecast is based on previous years cost of
sales.

Full credit can only be obtained if referenced formulae are used in all cells.

Selling, General & Administrative Expense and Other Operating expenses are
expected to stay at the same level as they were in 2016. Row 20 and 23 for these
expenses are already filled for you.

6. The company is planning to invest in research and development in next four years. 2
The expected increase in research & development for each successive year is 9%,
7%, 5% and 3% respectively of the net revenue of the last year. Select cell D21 to
G21 and input an array formula to compute forecasted increase in research and
development for each of the four years (2017-2020).

Example: If the net revenue for 2016 are 20,000 then the increase in Research &
Development Expense for 2017 would be 2,200 i.e. 20,000 * 11%.

Suggestion: You may need to use transpose function within array formula for the
computation in this part.

7. Complete row 22 for forecasted Research and development by adding the increase 1
in Research & development (computed in step 7 above) and the research &
development expense for the previous year.

Example: If the research & development expense for last year is 5,000 and the
increment in research & development expense is calculated as 2,200 (done in step
7). The research & development expense for this year would be 7,200.

Full credit can only be obtained if referenced formulae are used in all cells.

8. Compute the forecasted gross profit, total operating expenses and operating income 1
using the same formulae as done in part B (step 1, 2 and 3) above for all four years
(from 2017 to 2020).

Note: As you enter relevant data, the formatting of the cells should not be changed.
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After completing part D, relevant cells of the worksheet appear as the image below:

Note: the numbers in your excel file may not match the numbers in the image