Why is trend just as important if not more important than information that pertains to only one year?
What is meant by "presentation of financial statement information in common-size amounts rather than dollar amounts?" Why is this type of presentation sometimes more meaningful than use of actual dollar amounts?© BrainMass Inc. brainmass.com June 4, 2020, 1:27 am ad1c9bdddf
Please refer to the attached file for the response.
TREND ANALYSIS AND COMMON SIZE FINANCIAL STATEMENTS
Financial statements provide information in assessing the financial health of a company. Basically, these include the Balance Sheet, Income statement, and the Statement of Cash Flows. While a one-year information is important in providing a picture of the company's current financial condition, several years of financial information could provide a more adequate information on the company's track record, through a trend analysis.
A trend analysis is important because it would tell whether the company's ...
The solution discusses the importance of trend and common size amounts for presentation of financials.