Using the data for Johnson & Johnson (NYSE: JNJ), presented below:a. Calculate t

Using the data for Johnson & Johnson (NYSE: JNJ), presented below:a. Calculate the ratio of each years’ data to the previous year for each of the above items for JNJ. Forexample, for the year 2018, the ratio for sales is $81,534/$76,481 = 1.06607.b. From your calculations in part a, calculate each year’s rate of growth. Using the example in part a, theratio is 1.06607, so the percentage growth in sales for 2018 is 1.06607 – 1 or 6.607%.c. Calculate the average growth rate (using the AVERAGE function) of each of the above items using theresults you calculated in part b. These averages are arithmetic averages.d. Use the Geomean function to estimate the compound annual average growth rate (CAGR) for each ofthe above items using the results that you calculated in part a. Be sure to subtract 1 from the result toarrive at a percent change. These are geometric averages.e. Compare the results from part c to those for part d for each item. Is it true that the arithmetic averagegrowth rate is always greater than or equal to the geometric average (CAGR)?f. Contrast the results for the geometric averages to those for the arithmetic average for the variableslisted below. What do you observe about the differences in the two growth estimates for Sales andRetained Earnings? What do you observe about the differences in the two estimates for Net Cash fromOperations and Net Income? Hint: Look at the results from part b (the individual yearly growth rates) foreach variable to draw some conclusions about the variation between the arithmetic and geometricaverages.1. Sales2. Retained Earnings3. Total Assets4. Net Cash from Operations5. Net Income
Requirements: 2-3

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