To compute trend percents the analyst should:
A) Select a base period, assign each item in the base period statement a weight of 100%, and then express financial numbers from other periods as a percent of their base period number.
B) Subtract the analysis period number from the base period number.
C) Subtract the base period amount from the analysis period amount, divide the result by the analysis period amount, then multiply that amount by 100.
D) Compare amounts across industries using Dun and Bradstreet.
E) All of these.

Question

Quizplus · Accepted Answer

To compute trend percents, the analyst should select a base period, assign each item in the base period statement a weight of 100%, and then express financial numbers from other periods as a percent of their base period number. This allows for a comparison of how specific items have changed over time. Option B subtracts the analysis period number from the base period number, which is not a correct method for computing trend percents. Option C subtracts the base period amount from the analysis period amount and divides the result by the analysis period amount, which is a correct method for computing percent change but not trend percents. Option D suggests comparing amounts across industries using Dun and Bradstreet, which is not a correct method for computing trend percents.

To Compute Trend Percents the Analyst Should