Trend analysis
Trend analysis is a type of horizontal analysis that deals with percentage changes in items on the financial reports for several years. This analysis uses a base year to calculate the percentage change of each item.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Trend analysis. A type of horizontal analysis that deals with percentage changes in items on the financial reports for several years. This analysis uses a base year to calculate the percentage change of each item.
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Trend analysis. An analysis of a firm's financial ratios over time. It is used to estimate the likelihood of improvement or deterioration in its financial situation.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Trend analysis. An analysis of a firm's financial ratios over time; used to estimate the likelihood of improvement or deterioration in its financial condition.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
