Asked by Claudia Gonzalez on May 13, 2024
Verified
Trend statements often provide a clearer indication of growth and decline than do common size statements.
Trend Statements
Financial statements analyzed over several time periods to identify patterns or trends in a company's financial performance.
Common Size Statements
Financial statements that present all line items as a percentage of a common base figure, facilitating comparison across periods and companies.
- Gain insight into the underlying principles and intentions behind common size statements and trend statements.
Verified Answer
NA
NOOR AZLINA ABDULLAHMay 19, 2024
Final Answer :
True
Explanation :
Trend statements track the change in financial data over time, making it easier to spot trends and identify growth or decline patterns. Common size statements, on the other hand, show the relative importance of each item on a financial statement, but do not show the change over time. Therefore, trend statements are more useful in predicting future performance than common size statements.
Learning Objectives
- Gain insight into the underlying principles and intentions behind common size statements and trend statements.
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