An analysis of a firm's financial ratios over time used to determine the improvement or deterioration in its financial situation is called _____.
A) sensitivity analysis
B) the DuPont chart
C) ratio analysis
D) benchmarking analysis
E) trend analysis

Question

Quizplus · Accepted Answer

Trend analysis is the process of analyzing a firm's financial ratios over time to identify patterns and changes that indicate improvement or deterioration in its financial situation. Ratio analysis, benchmarking analysis, sensitivity analysis, and the DuPont chart are all useful tools for assessing a firm's financial position, but trend analysis is specifically focused on identifying changes over time.

An Analysis of a Firm's Financial Ratios Over Time Used