Question
In: Finance
Do you think that businesses should make both time series and cross sectional analyses? Why?
Do you think that businesses should make both time series and cross sectional analyses? Why?
Solutions
Expert Solution
Yes,the businesses could make both the time period analysis and cross-sectional analysis in order to have a better view of its performance as cross-sectional analysis is of the comparing of performance of the company with respect to its industry peers whereas time period analysis will be comparing the performance of the company in past with itself by finding out the trend of performance of the company.
Cross sectional analysis will mean that the various ratios of the company will be compared to the industry peers in order to find the under performance and over performance of company and trend analysis its type of time period analysis in which that has of various time period should be analysed by the company in order to find out the performance of the company in the past years.
I do think that businesses should be doing both type of analysis because it will be helpful for the business by doing cross sectional analysis to find the position of the company in overall industry and time period analysis will be helping it in finding out the the performers trends.
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