Question

Skin Ambitions Medical Spa had 2021 revenue generated from existing customers (i.e., customers who were patrons of the firm in 2020) of $400,000. 2020 total revenue was $700,000. In 2021, the spa had $300,000 in revenue generated from new customers, of which $200,000 was generated from customers who had been referred to the spa by an existing client. What is the earned growth rate for Skin Ambitions? Group of answer choices:

a. 23.81%
b. - 14.3%
c. -20.87%
d. 10.12%

There is not enough information provided to calculate earned growth for Skin Ambitions.

Answer 1

To calculate the earned growth rate, we focus on the revenue from existing customers, which did not change from 2020 to 2021. Therefore, there's no earned growth rate to report for Skin Ambitions Medical Spa.

Step-by-step explanation:

The student's question relates to calculating the earned growth rate for Skin Ambitions Medical Spa. The earned growth rate can be determined by assessing the revenue growth specifically from existing customers. Based on the information provided, in 2020, the total revenue was $700,000. In 2021, revenue from existing customers was $400,000. Adding the revenue from new customers ($300,000) gives a total revenue for 2021 of $700,000, which is the same as in 2020, indicating that there is no overall revenue growth. However, since we are focusing on existing customers, the revenue earned from them did not change year over year, meaning there is no earned growth from existing customers.