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Foundations Of Financial Management
Found in: Page 75
Foundations Of Financial Management

Foundations Of Financial Management

Book edition 16th
Author(s) Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Pages 768 pages
ISBN 9781259277160

Short Answer

Why is trend analysis helpful in analyzing ratios?

Trend analysis represents the changes in the ratios over time. It allows one to see changes that occur in the profitability, capital employed, etc. of the company over time.

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Step by Step Solution

Trend analysis

Trend analysis shows changes in a ratio over time, which helps the company to compare its current performance with the past and forecast future events.

Ratio analysis

Ratio analysis is the analysis of various pieces of financial information. It compares the company’s profitability in relation to the past years. This is done through trend analysis. Trend analysis helps analyze the company’s data by focusing on the change in specific line items in the financial statements.

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