Question

In: Finance

Trend Analysis & Ratio Analysis Ratio analysis uses percentage or decimal calculations of comparison to at...

Trend Analysis & Ratio Analysis

Ratio analysis uses percentage or decimal calculations of comparison to at least two different sets of financial data using two industries. Comparing how one relates (compares) to another. Be sure to provide website

Solutions

Expert Solution

Trend Analysis is used at the time of the technical analysis whereas Ratio analysis is used in the fundamental analysis of the company. Ratio Analysis used time series and cross sectional analysis of the company's financial Position. Trend Analysis is based on the observation of the market participants that they tend to act in herds and that trend tend to stay in one place for quite a time. A trend can be upward, downward, sideways or no apparent trends. Ratios Analysis is a tool that helps in the interpretation of the accounts and can discover issues and problems not immediately evident from the accounts and financial information provided in the annual report. Ratio's provide the basis for inter-firm comparisons allowing managers to benchmark the performance and efficiency of the firm against its competitors. Trends can then be examined and analyzed. Stakeholders may use ratios to support their decision making. Stakeholders, for eg. may use profit ratios to support pay claims and creditors can use liquidity ratios to evaluate whether debts will be repaid.

jeff jeffy answered 4 months ago
Next > < Previous

Related Solutions

Why are trend analysis and industry comparison important to financial ratio analysis?
Why are trend analysis and industry comparison important to financial ratio analysis?
Why are trend analysis and industry comparison important to financial ratio analysis?
Why are trend analysis and industry comparison important to financial ratio analysis?
Directions: All calculations involving interest rates should be answered as a percentage to two decimal places,...
Directions: All calculations involving interest rates should be answered as a percentage to two decimal places, for example 5.42% rather than 0.05. 1.) A bank has $50M in rate-sensitive assets and $35M in rate-sensitive liabilities. What is the impact on the bank’s profits if rates decrease by 50 basis points?
What is another term for the cost-volume-profit analysis? ratio analysis liquidity analysis trend analysis breakeven analysis...
What is another term for the cost-volume-profit analysis? ratio analysis liquidity analysis trend analysis breakeven analysis The cost-volume-profit analysis is a ________________ tool, something used by those internal to an organization for budgeting, planning, and decision-making purposes. revenue managerial accounting liquidity traditional financial accounting Sales commission is an example of a fixed cost. True False Utilities are an example of ___________ costs. mixed fixed variable All of the above. Revenues – total variable costs – total fixed costs = _______________....
How does inflation distort ratio analysis comparisons for onecompany over time (trend analysis) and for...
How does inflation distort ratio analysis comparisons for one company over time (trend analysis) and for different companies that are being compared? Are only balance sheet items or both balance sheet and income statement items affected?
Develop a percentage change trend analysis for each of the three years.  Results must be entered in...
Develop a percentage change trend analysis for each of the three years.  Results must be entered in schedule below. Make at least one observation that is revealed by information provided in the analysis. 2011 2012 2013 Historical Data Inventory 16,500 16,300 16,200 Property Plant & Equipment 82,500 84,000 80,100 Current Liabilities 35,000 32,500 31,800 Sales 150,000 135,000 128,000 Cost of Goods Sold 86,000 75,000 70,000 Operating Expenses 52,000 57,000 50,000 Net Income (loss) 12,000 3,000 8000 Trend Percentages Inventory Property Plant...
How is ratio and trend analysis used by the controller? Need answer this question for 10...
How is ratio and trend analysis used by the controller? Need answer this question for 10 points please
Perform a ratio analysis and comment on the internal trend, industry benchmark and possible ways to...
Perform a ratio analysis and comment on the internal trend, industry benchmark and possible ways to improve each ratio listed below. The use of bullet form is acceptable. 2020 2019 2018 Industry Profit Margin 7.00% 6.50% 6.20% 7.50% Total Asset Turnover 1.30 1.25 1.20 1.10 ROA 9.10% 8.13% 7.44% 8.25% Receivable Turnover 6.00 6.25 6.50 8.00 Inventory Turnover 10.50 11.5 11.00 10.00 Current Ratio 2.20 2.30 2.30 2.40 Debt to Total Assets 56.00% 54.00% 52.00% 45.00% Times Interest Earned 3.90...
How does inflation distort ratio analysis comparisons for one company over time (trend analysis) and for...
How does inflation distort ratio analysis comparisons for one company over time (trend analysis) and for different companies that are being compared? Are only balance sheet items or both balance sheet and income statement items affected? Your response should be a minimum of 2-3 paragraphs and should include your comments/opinion, provide examples, support your perspective. Read all other posts and respond to two (2) other posts Can someone please answer this effectively and provide input? I am sort of struggling...
Trend or time-series analysis is another term used for ____ analysis Multiple Choice Ratio Horizontal Vertical...
Trend or time-series analysis is another term used for ____ analysis Multiple Choice Ratio Horizontal Vertical Diagonal Vertical analysis refers to: Multiple Choice Expressing each item in a financial statement as a percentage of the same base amount. Expressing each item in a financial statement in order of highest amount to lowest amount. Expressing each item in a financial statement as its trend over time. Expressing each item in a financial statement in order of highest importance to lowest importance....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT