Question

To compute trend percentages the analyst should: Multiple Choice Select a base period, divide analysis period amount by the base period amount and multiply that amount by 100. Subtract the analysis period number from the base period number. Subtract the base period amount from the analysis period amount, divide the result by the analysis period amount, then multiply that amount by 100. Compare amounts across industries using Dun and Bradstreet. Compare amounts to a competitor.

Answer 1

Answer:

Select a base period, divide analysis period amount by the base period amount and multiply that amount by 100.

Explanation:

In Financial accounting, trend percentages also known as the index numbers, are typically used for comparing financial statements over a period of time, owing to the fact that they give trends and changes occurring through time with respect to a base period.

To compute trend percentages the analyst should select a base period, divide analysis period amount by the base period amount and multiply that amount by 100.

Trend percentages are similar to the horizontal analysis but are calculated in relation to base period or year.