Stern Company's net income was $75,000 for 2018, $81,250 for 2019, and $69,800 for 2020. Assume trend percentages for net income over the three-year period are computed, with 2018 serving as the base year.
The trend percentage for 2020's net income is:

Question

Quizplus · Accepted Answer

The trend percentage is calculated by taking the year of interest (2020) and dividing its net income by the base year's (2018) net income, then multiplying by 100. For 2020, this is ($69,800 / $75,000) * 100 = 93.1%.

Stern Company's Net Income Was $75,000 for 2018, $81,250 for 2019