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Trend analysis is beneficial in analyzing ratios

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Reference no: EM132892949

IMPORTANCE OF TREND ANALYSIS

Over the course of the business cycle, sales and profitability may expand and contract, and ratio analysis for any one year may not present an accurate picture of the firm. Therefore, we look at the trend analysis of performance over a number of years.

Do you think that trend analysis is beneficial in analyzing ratios? What additional factors would you consider to be important in trend analysis?

Reference no: EM132892949

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