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What you will learn
- Calculate total growth using the same period and currency.
- Check an unweighted average of segment growth percentages.
- Separate reported growth from an explicitly scoped acquisition case.
Prepare a newsroom for 40 minutes
Allow five minutes for roles, ten for segment figures, ten for headlines, ten for a new acquisition card and five for shared feedback. Choose a calculator, source checker and editor in each group. All table amounts are fictional SEK millions and refer to two full years of equal length.
Assume unchanged currency, accounting policies and businesses in both columns. Segment sales add exactly to company sales; the model has no intersegment sales or other adjustments. Ask students to write these assumptions above their worksheet before calculating. A real segment dataset also needs to be read alongside the explanations in its report.
If the table does not fit, scroll it sideways.
| Segment | Year 1, SEK million | Year 2, SEK million |
|---|---|---|
| A | 300 | 330 |
| B | 100 | 160 |
| C | 100 | 110 |
| Total | 500 | 600 |
Student worksheet: judge three claims
Give groups the headlines “Company grows 20%”, “Company grows 26.67%” and “The fastest-growing segment accounts for the entire increase”. Calculate the money change for each row before calculating segment percentages. Label the starting amount used as the denominator for every percentage.
Write a short correction for each inaccurate headline, including both calculation and explanation. Ask the editor to classify each claim as supported, contradicted or missing information. Being the fastest-growing segment in percentage terms does not mean that the other segments contribute nothing in money terms. Students should retain both kinds of measurement in their notes.
Answers: a total increase of SEK 100 million and 20%
Segment increases are SEK 30, 60 and 10 million. Total sales therefore increase by 100, and 100 / 500 × 100 = 20%. Segment growth rates are 10%, 60% and 10%. Their simple average is approximately 26.67%, which does not describe the company’s aggregate sales growth.
Starting weights are 60%, 20% and 20%. The weighted calculation 0.60 × 10 + 0.20 × 60 + 0.20 × 10 = 20%. B contributes 60 of the total increase of 100, while A and C supply the remainder. Headline one is supported; headline two uses incorrect weighting and headline three ignores two positive contributions.
Teacher notes: replace only the second-year card
Return to starting total 500. A separate year card reports 650, including 50 from a new business absent from the comparison year. Assume this is the only scope change and that currency and period length are unchanged. Reported growth is 30%; the existing businesses reach 600 and grow 20%. This card is separate from the first segment table.
Assess whether students show which part of later sales is removed and explain why. Do not label every such subtraction the company’s official organic growth: real reports may define adjustments differently. Finish with a question to the report’s author about comparability. Company search supports identity checks; this activity does not promise automatic segment analysis.
Try it yourself
A new card shows SEK 400 million in year 1 and 480 in year 2, including 40 from an acquisition. Currency and period are unchanged, and the acquisition is the only scope change. Which two growth figures can the newsroom state?
Show the solution and explanation
Reported growth is 20%. The existing businesses grew 10% under the card’s assumptions.
(480 − 400) / 400 × 100 = 20. Removing the acquisition’s 40 leaves later sales 440; (440 − 400) / 400 × 100 = 10.
Check your understanding
Why is a simple average misleading here?
The segments have different starting sizes and need weights to describe the company total.
Does sales growth prove that profit grows by the same amount?
No. The worksheet provides no costs or profit figures.
Practise with virtual money
Try what you just learned in a practice portfolio with virtual money. You don't deposit any real money.
How the practice portfolio worksKeep learning and practising
More activities on this topic
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- Net debt classroom activity: loan and cash event cards with answers
- Liquidity classroom worksheet: build a payment calendar and find the cash gap
- Cash-flow bridge classroom activity: sort payment cards and reconcile cash
- ROE classroom worksheet: compare equity bases and shareholder returns
- Inventory classroom activity: item cards, turnover and worked answers
Sources and examples
- SEC: reporting periods, cash flows and inventory ratios
- CFA Institute: comparison bases and multiple financial ratios
The sources support the factual explanations. Calculations and exercises were created for this lesson. Amounts and price changes are invented unless stated otherwise.
This material is educational and does not recommend securities to buy. A simulated result does not guarantee a future result.
