Describe how trend analysis differs from ratio analysis and give an example of trend analysis. Discuss how trend analysis might be used to make business decisions. Sustainability

Principal Discussion Responses due Thursday, 11:59.59pm Central. Peer Responses due Saturday, 11:59.59pm Central.
Primary task response: Write 200 to 250 words in the Discussion Board Area and respond to these questions. Include your ideas, thoughts, and comments.
To prepare for the discussion, please watch this video:
Prepare a Financial Data Trend Analysis
These will serve as the basis for your future conversations with classmates. Use examples and concrete language to support your points. The following questions should be the focus of your conversation:
Explain how trend analysis is different from ratio analysis. Give an example.
Discussion about trends that could be used for business decisions.

 

Sustainability

 

Answer

To establish norms and predict the future, corporations use both historical and current data. Trend Analysis, which compares and contrasts different data types from the past with the present, is one of the most popular methods financial managers use. Financial ratios, on the other hand, are used to examine interdependencies among a variety of variables (Knipe and al. 2020). Financial ratios are a way to represent trends within the financial sector. Financial ratios, true to their name, are the basis of trend analysis. Inputs for both trend and ratio analysis come from the same place: the financial statements. Financial statements provide the basis for trend analysis. Trend analyses are based on the analysis of financial statements individually (Haberl and al. 2020). The analysis may include percentage shifts. Ratios, on the other hand, are used to compare items and determine their associations. An accountant can compute most ratios without having to include them in the same income statement. Ratios provide a visual representation of performance that is dependent upon several factors in the financial statements. Trend analysis provides details about the development of specific areas within a company’s operation. Cont…

 

 

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