【正文】 ing SGA and revenue in 1999 are proportional to SGA and revenue in 1996) ?= = $166MM 5 CU7112997ECA Bain Math Percent Definition: A percentage (abbreviated “percent”) is a convenient way to express a ratio. Literally, percentage means “per 100.” Application: In percentage terms, = 25 per 100 or 25% In her first year at Bain, an AC logged 7,000 frequent flier miles by flying to her client. In her second year, she logged 25,000 miles. What is the percentage increase in miles? Given: A percentage can be used to express the change in a number from one time period to the next Answer: 1 = 1 = = 257% 25,000 7,000 % change = = 1 new value original value original value new value original value The ratio of 5 to 20 is or 5 20 6 CU7112997ECA Bain Math Inflation Definitions ? If an item cost $ in 1997 and cost $ in 1998, inflation was 3% from 1997 to 1998. The item is not intrinsically more valuable in 1998 the dollar is less valuable ? When calculating the “real” growth of a dollar figure over time (., revenue growth, unit cost growth), it is necessary to subtract out the effects of inflation. Inflationary growth is not “real” growth because inflation does not create intrinsic value. Definition: A price deflator is a measure of inflation over time. Related Terminology: 1. Real (constant) dollars: 2. Nominal (current) dollars: 3. Price deflator Price deflator (current year) Price deflator (base year) Inflation between current year and base year = Dollar figure (current year) Dollar figure (base year) = Dollar figures for a number of years that are stated in a chosen “base” year’s dollar terms (., inflation has been taken out). Any year can be chosen as the base year, but all dollar figures must be stated in the same base year Dollar figures for a number of years that are stated in each individual year’s dollar terms (., inflation has not been taken out). Inflation is defined as the yearoveryear decrease in the value of a unit of currency. 7 CU7112997ECA Bain Math Inflation . Price Deflators *1996 is the base year Note: These are the . Price Deflators which WEFA Group has forecasted through the year 2023. The library has purchased this time series for all Bain employees to use. Ye a r 1 9 9 6 = 1 0 0 * % C h a n g e Ye a r 1 9 9 6 = 1 0 0 * % C h a n g e1970 27 . 79 5. 32 1996 10 0. 00 1. 95 1971 29 . 23 5. 18 1997 10 1. 97 1. 97 1972 30 . 46 4. 23 1998 10 4. 48 2. 46 1973 32 . 18 5. 64 1999 10 7. 10 2. 51 1974 35 . 07 8. 99 2023 10 9. 80 2. 52 1975 38 . 36 9. 37 2023 11 2. 51 2. 47 1976 40 . 61 5. 86 2023 11 5. 41 2. 58 1977 43 . 23 6. 45 2023 11 8. 58 2. 75 1978 46 . 37 7. 26 2023 12 2. 02 2. 90 1979 50 . 35 8. 58 2023 12 5. 65 2. 97 1980 55 . 00 9. 25 2023 12 9. 31 2. 92 1981 60 . 18 9. 41 2023 13 2. 96 2. 82 1982 63 . 97 6. 30 2023 13 6. 57 2. 71 1983 66 . 68 4. 24 2023 14 0. 26 2. 70 1984 69 . 21 3. 79 2023 14 4. 06 2. 71 1985 71 . 59 3. 43 2023 14 7. 89 2. 65 1986 73 . 46 2. 62 2023 15 1. 90 2. 72 1987 75 . 71 3. 06 2023 15 6. 05 2. 73 1988 78 . 48 3. 65 2023 16 0. 29 2. 72 1989 81 . 79 4. 22 2023 16 4. 73 2. 76 1990 85 . 34 4. 34 2023 16 9. 25 2. 75 1991 88 . 72 3. 97 2023 17 3. 83 2. 71 1992 91 . 16 2. 75 2023 17 8. 53 2. 70 1993 93 .