Determining whether a firm's financial position is improving or deteriorating requires analysis of more than one set of financial statements. Trend analysis is one method of measuring a firm's performance over time.

Question

Quizplus · Accepted Answer

Trend analysis is a method of analyzing a firm's performance over time by comparing financial statements from different periods to identify trends and changes in key financial metrics. Therefore, it is true that determining whether a firm's financial position is improving or deteriorating requires analysis of more than one set of financial statements, and trend analysis is one such method of analysis.

Determining Whether a Firm's Financial Position Is Improving or Deteriorating