Which of the following statements regarding trend analysis is true?
A)Time-series analysis is an example of trend analysis.
B)Trend data are always in dollars.
C)Trend analysis is also known as vertical analysis.
D)Common-size analysis is an example of trend analysis.

Question

Quizplus · Accepted Answer

Time-series analysis, which involves analyzing data over time to identify trends, is a type of trend analysis. The other options are incorrect. Trend data can be in various units, not just dollars. Trend analysis is not the same as vertical analysis, which involves comparing financial statement items to a base amount. Finally, common-size analysis is a different type of financial analysis that involves expressing financial statement line items as percentages of a base amount.

Which of the Following Statements Regarding Trend Analysis Is True