Asked by veena shenoy on Jul 02, 2024
Verified
Trend statements are better than common size statements at indicating which of the following?
A) Stability.
B) Monetary changes.
C) Profitability.
D) Growth and decline.
Trend Statements
Financial reports or analyses that track the progress, direction, or movements of specific metrics or indicators over periods.
Stability
The degree to which an economy, market, or financial asset experiences minimal fluctuations and maintains a consistent performance over time.
Growth And Decline
Refers to the phases in the business cycle or individual investments where they experience an increase in value (growth) or a decrease in value (decline).
- Evaluate the financial results of corporations and contrast them by employing trend analysis and common-size financial statements.
Verified Answer
AA
Alexzander Adams7 days ago
Final Answer :
D
Explanation :
Trend statements show changes over time and can therefore indicate growth or decline in various financial metrics. Common size statements only show the relative proportion of each item in a financial statement, but do not necessarily show changes over time or trends. Therefore, trend statements are better at indicating growth and decline.
Learning Objectives
- Evaluate the financial results of corporations and contrast them by employing trend analysis and common-size financial statements.