Gulf Aviation generates $800 million per year, with no material growth. The consolidated revenues for DefenseCo are $1.5 billion in Year 1, $1.8 billion in Year 2 (the year of the acquisition), and $2.5 billion in Year 3. If DefenseCo closed the acquisition of Gulf Aviation on October 1 of Year 2, what is the “apples-to-apples” organic growth for Defense Co in Year 2 and Year 3? How does this differ from reported revenues? Assume Gulf Aviation revenues are consolidated into DefenseCo only after the acquisition close and that the fiscal year closes for both companies on December 31 of each year.
Please show calculations