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    Importance of Trend; Common Size Amounts for Financials

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    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?

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    https://brainmass.com/business/finance/importance-trend-common-size-amounts-financials-402022

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    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.
    TREND ANALYSIS
    A trend analysis is important because it would tell whether the company's ...

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    The solution discusses the importance of trend and common size amounts for presentation of financials.

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