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Using the following data, conduct a trend analysis for 2018 using 2015 as the base year (round to...

Question:

Using the following data, conduct a trend analysis for 2018 using 2015 as the base year (round to 2 decimal places).

2015 Total Assets=573,000

2016 Total Assets=563,000

2017 Total Assets=580,000

2018 Total Assets=598,000

Trend Analysis:

In trend analysis, the profit and loss statement and statement of financial position are analyzed to evaluate the financial performance of the organization. The horizontal analysis and vertical analysis used in trend analysis for inter-period comparison and inter-firm comparison

Answer and Explanation:

In trend analysis, the base year figure is taken as 100% and the figures for coming years is calculated as a percentage of base year

  • The total assets in 2015 is $573,000
  • The base year is considered as the base year
  • The total assets in 2018 is $598,000

Trend analysis = (Total assets amount in 2018 / base year total assets amount) x 100
= ($598,000 / $573,000) x 100
=1.0436 x 100
=104.36%

The total assets in 2018 are 104.36% of the base year figures


Learn more about this topic:

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Comparative Statements as Balance Sheet Disclosures

from Accounting 201: Intermediate Accounting I

Chapter 4 / Lesson 9
762

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