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Trend Analysis and Forecast for EI DuPont de Nemours & Co.

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Trend and Ratio Analysis

Perform trend and ratio analysis on the following for EI DuPont de Nemours & Co. (DD):

1. Current assets
2. Fixed assets
3. Current liabilities
4. Long-term liabilities
5. Owner's equity
6. Sales revenue
7. EBIT
8. EPS

Project this into three years.

The balance sheet is attached.

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Solution Summary

If you are asked to project into the future, the easiest way to do so is to calculate the average percentage change and carry it across to the fore casted years.

For example, let's say you are given the figures for 2006, 2007 and 2008 and you are asked to forecast for 2009 and 2010. After you find the percentage change for 2006. 2007 and 2008, take the average of the percentage change. Then grow the 2008 amount by the average for 2009. Then for 2010, the 2009 amount is grown by the average percentage change.

SEE THE ATTACHED EXCEL FILE FOR NUMERICAL SOLUTION.

Solution Preview

The key to trend analysis is finding the percentage change from one year to the other. Usually, the previous year is used as the base.

For example, let's say that you are conducting trend analysis for the years 2001 and 2002. When you fins the percentage ...

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