Question

Exxon Mobil			Chevron
($millions)	2011	2010	2009	2011	2010	2009
Revenue...	$486,429	$383,221	$310,586	$253,706	$204,958	$171,636
Cost of revenue...	306,802	233,751	185,833	171,572	135,655	117,510
Selling, general, & administrative expenses...	88,459	79,348	75,490	20,373	22,958	22,118
Net income...	41,060	30,460	19,280	26,895	19,024	10,483
Accounts receivable...	38,642	32,284	27,645	21,793	20,759	17,703
Dividends paid...	6326	8,779	8,303	6,210	5,746	5,373

Use the information above to forecast the next two year revenue for Exxon Mobil. Based your forecasts on the average of the actual revenue growth between 2009 to 2010 and 2010 to 2011.

Use the information above to forecast the next two years cost of revenue and selling, general, and administrative expenses for Exxon Mobil. Base your forecasts on the actual relationship between these expenses and revenue for 2011.

Answer 1

Formula to sales growth rate = (Sales in current year - sales in previous year)/Sales in previous year
The sales growth rate from 2009 to 2010
Sales growth	(383221 - 310586)/310586
Sales growth	23.39%
The sales growth rate from 2010 to 2011
Sales growth	(486429 -383221)/383221
Sales growth	26.93%
Average of sales growth = (23.39%+26.93%)/2
Average of sales growth	25.16%
Therefore revenue in 2012 = 486429*(1.2516)	$608,810.05
Revenue in 2013 = 608,810*05*(1.2516)	$761,981.04
The revenue in 2012 would be $608,810.05 and in 2013 would be $761,981.04
Cost of revenue/Sales in 2011	306802/486429	63.07%
Cost of revenue in 2012	608810.05*63.07%	$383,990.55
Cost of revenue in 2013	761981.04*63.07%	$480,599.04
The cost of revenue in 2012 would be $383,990.55 and in 2013 would be 480,599.04
Selling, general and administrative expense/Revenue in 2011	88459/486429	18.19%
Selling, general and administrative expense in 2012	608810.05*18.19%	$110,714.47
Selling, general and administrative expense in 2013	761981.04*18.19%	$138,569.21
The selling, general and administrative expense in 2012 would be $110,714.47 and in 2013 would be $138,569.21