The method of evaluating the firm's performance over time is known as:
A) trend analysis
B) cross-sectional analysis
C) industry comparative analysis
D) Due Pont analysis

Question

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Trend analysis is the method of evaluating a firm's performance over time by comparing the changes in key financial ratios and indicators from year to year. This helps to identify patterns and trends in the firm's financial performance, such as improvements or declines in profitability, liquidity, and efficiency. Cross-sectional analysis involves comparing a firm's financial performance to that of other companies in the same industry, while industry comparative analysis involves comparing a firm's financial performance to industry benchmarks and standards. Due Pont analysis is a method of decomposing a firm's return on equity into its constituent parts to identify the sources of a firm's profitability.

The Method of Evaluating the Firm's Performance Over Time Is