## Trend Analysis:

In trend analysis, the financial statements (profit and loss statement and balance sheet) are analyzed to evaluate the financial performance of the organization. The horizontal analysis and vertical analysis used in trend analysis and are used to extrapolate the numbers based on past trends in the future

• The sales will increase by 25% next year and the projected sales revenue is $1,875,000 ($1,500,000 x 125%)

The percentage of PP&E (net) and depreciation to sales revenue for the current year and next year is calculated below

Current Year Next Year
Sales (A) $1,500,000$1,875,000
depreciation expense (B) $72,000$90,000
Percentage {(C= B/A) *100) 4.80% 4.80%
PP&E (net) (D) $875,000$1,093,750
Percentage {(E= D/A) *100) 58.3333% 58.3333%

Increase In Capex = next year PP&E (net) - current year PP&E (net) + next year depreciation expense - current year depreciation expense
= $1,093,750 -$875,000 + $90,000.00 -$72,000
=$236,750 The investment in Capex would be$236,750 in the coming year 