Beruflich Dokumente
Kultur Dokumente
Trend analysis is a form of comparative analysis that is often employed to identify current and future movements of an investment or group of investments. The process may involve comparing past and current financial ratios as they related to various institutions in order to project how long the current trend will continue.
The process of a trend analysis begins with identifying the category of the investments that are under consideration.
After identifying past and present factors that are maintaining a current trend in performance, the investor can analyze each factor and project which factors are likely to continue exerting influence on the direction of the investment.
Trend analysis is important when examining a firm's financial statements, because financial analysts can see how company assets have grown over time. In the competitive landscape, the topic of asset growth is often preeminent, especially in industries requiring substantial upfront investments -- such as oil and gas, mining and the military. By evaluating performance trends, corporate analysts also can tell whether an organization is adeptly managing its money and investing it wisely.
The goal is to calculate and analyze the amount change and percent change from one period to the next.
For example :
In fiscal years 2010 and 2009, Coca-Cola had the operating income shown as follows :
2010 ( Amount ) Operating Income $8,449 2009 ( Amount) $ 8,231 Amount Change ??? Percent Change ???
2009 ( Amount)
$ 8,231
Amount Change
$218
Percent Change
$ 2.64 %
Trend analysis is often used to evaluate each line item on the income statement ... let us see how is it analysed ..
Trend analysis is often used to evaluate each line item on the Balance sheet ...
Formula to Find Trend percentage for several years : Trend percentage = Current year Base year
2010 Net sales Percentage trend Operating income $35,119
146 %
$ 8,449
$ 8,231 130 %
$ 8,446 134 %
$ 7,252 115 %
$ 6,308 100%