Growth Is the Primary Focus for All Companies

question 54

Essay

Growth is the primary focus for all companies. A factor that acts as a key term while analysing the growth of a company is the number of resources/ employees working for the company over a period of time. One such study about a start-up company's growth, in terms of the increase in the number of employees per month in a span of 2 years is shown below:

a. Create a line chart for these time series data. What interpretations can you make about the increase in the number of employees over these 24 months?
b. Fit a linear trendline to the data. What does the trendline indicate about the increase in the number of employees over these 24 months?

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Definitions:

Products

Goods or services offered by a company to customers in the marketplace.

Crossover Rate

The rate of return at which two projects have the same net present value; used in capital budgeting to evaluate the desirability of investments or projects.

WACC

A measure of a firm's blended cost of capital across all sources, including equity and debt.

NPV

Net Present Value is the calculation used to determine the value of future cash flows in today's dollars, subtracting the initial investment.