How Do You Calculate Revenue Per Share Using the Midpoint Formula?

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The discussion centers on calculating Twitter, Inc.'s revenue per share for 2014 using the midpoint formula, with 2013 and 2015 figures provided. The correct setup involves averaging the years and corresponding revenues, leading to an estimated revenue per share of $2.21 for 2014. Participants noted errors in the initial calculations, such as incorrect year values and missing divisors. There is debate over the appropriateness of assuming a linear growth model for revenue, with some arguing it lacks real-world logic. Ultimately, the exercise serves as a basic interpolation problem rather than a reflection of actual financial performance.
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Homework Statement
Estimate the revenue per share in the year 2014.
Relevant Equations
Midpoint Formula

[(x_1 + x_2)/2, (y_1 + y_2)/2]
The revenue per share for Twitter, Inc. was $1.17 in 2013 and $3.25 in 2015. Use the Midpoint Formula to estimate the revenue per share in 2014. Assume that the revenue per share followed a linear pattern. (Source: Twitter, Inc.)

This is an exercise using the midpoint formula. I just want to know if my set up is correct.

Let M = midpoint

M = [(2013 + 2015)/2, (1.17 + 3.25)/2]
 
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So what did you get as answers, your setup has a couple errors/typos bit basically match the general midpoint formula.

Do you see them?

Its important to have a good eye, and to question what you type.

To check your result you could plot them on graph paper and then determine the midpoint by ruler to check if your answer matches the measured midpoint.
 
jedishrfu said:
So what did you get as answers, your setup has a couple errors/typos bit basically match the general midpoint formula.

Do you see them?

Its important to have a good eye, and to question what you type.

To check your result you could plot them on graph paper and then determine the midpoint by ruler to check if your answer matches the measured midpoint.

1. All questions posted are EVEN NUMBER questions.

2. Most textbooks do not provide the answer to even number problems in the back of the book.
 
jedishrfu said:
So what did you get as answers, your setup has a couple errors/typos bit basically match the general midpoint formula.

Do you see them?

Its important to have a good eye, and to question what you type.

To check your result you could plot them on graph paper and then determine the midpoint by ruler to check if your answer matches the measured midpoint.
What typos? Are you saying that x_1 & x_2 should represent the years 2013 an 2015? If so, that has been corrected?

M = [(2013 + 2015)/2, (1.17 + 3.25)/2]

M = (4028/2, 4.42/2)

M = (2014, 2.21)

I would estimate the 2014 sales to have been about $2.21.

Is this right? I say yes.
 
Initially, you wrote 2013 + 3015 and forgot the 2 divisor in your answer.

The 3015 would surely throw things off if you didn't notice it.

Did you try to graph it?

yes you computed the correct answer.

Your initial setup had typos so it was wrong.
 
jedishrfu said:
You wrote 2013 + 3015 and forgot the 2 divisor in your answer. The 3015 would surely throw things off if you didn't notice it.

Did you try to graph it?
It was a typo. It has been corrected.
 
jedishrfu said:
You wrote 2013 + 3015 and forgot the 2 divisor in your answer. The 3015 would surely throw things off if you didn't notice it.

Did you try to graph it?
M = [(2013 + 2015)/2, (1.17 + 3.25)/2]

M = (4028/2, 4.42/2)

M = (2014, 2.21)

I would estimate the 2014 sales to have been about $2.21.
 
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nycmathguy said:
M = [(2013 + 2015)/2, (1.17 + 3.25)/2]

M = (4028/2, 4.42/2)

M = (2014, 2.21)

I would estimate the 2014 sales to have been about $2.21.
This isn't a criticism of your work, but of the question. There are two sides to numeracy - understanding calculations and knowing what calculations are appropriate.

In this case, there is no logic to say that a company's performance follows a linear curve. The earnings could easily have been zero in 2014 if that were a bad year.

This is also related to the idea of mathematics helping to develop your critical thinking. Questions like this, sadly, aid uncritical thinking.
 
My maths teacher when I was 14+, an ex amateur boxer called Mr Ross, was critical of things like this!
 
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PeroK said:
This isn't a criticism of your work, but of the question. There are two sides to numeracy - understanding calculations and knowing what calculations are appropriate.

In this case, there is no logic to say that a company's performance follows a linear curve. The earnings could easily have been zero in 2014 if that were a bad year.

This is also related to the idea of mathematics helping to develop your critical thinking. Questions like this, sadly, aid uncritical thinking.
Hey, blame Ron Larson. The question is from his precalculus book edition 10E.
 
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PeroK said:
My maths teacher when I was 14+, an ex amateur boxer called Mr Ross, was critical of things like this!
Mr. Ross' problem would be with Ron Larson not me. All the precalculus questions posted thus far come from Ron's edition 10E book.
 
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PeroK said:
In this case, there is no logic to say that a company's performance follows a linear curve.
Right, but the example is one of very simple interpolation that was dreamed up to make it seem like a real applied problem. If we look at this as a precalc problem in which linear growth is assumed, rather than as a real-world problem in finance or economics, I think the problem is reasonable.
 
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  • #13
Mark44 said:
Right, but the example is one of very simple interpolation that was dreamed up to make it seem like a real applied problem. If we look at this as a precalc problem in which linear growth is assumed, rather than as a real-world problem in finance or economics, I think the problem is reasonable.

This problem is not really worth arguing about. I am sure that Ron Larson knows why the problem is given as an exercise in chapter 1.
 
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