An analyst notes that the net income of a major corporation grew 10% last year and that it is currently growing at 11%. The analyst concludes that the net income will rise 12% next year. This is an example of a(n):
A) audit.
B) earnings forecast.
C) credit analysis.
D) business model.

Question

Quizplus · Accepted Answer

The statement is an example of an earnings forecast, which predicts future financial performance based on past and current trends. The analyst is using the growth rates from the past and present to make a projection about the future.

An Analyst Notes That the Net Income of a Major