Which one of the following statements about trend analysis is NOT correct?
A) The benchmark for trend analysis is based on a firm's historical performance.
B) It allows management to examine each ratio over time and determine whether the trend is good or bad for the firm.
C) It uses the Standard Industrial Classification (SIC) System to benchmark firms.
D) A ratio value that is changing typically prompts the financial manager to sort out the issues surrounding the change.

Question

Quizplus · Accepted Answer

Trend analysis does not use the Standard Industrial Classification (SIC) System to benchmark firms. Instead, it uses the firm's historical performance as a benchmark.

Which One of the Following Statements About Trend Analysis Is