Question : Net Profit Ratio of X Ltd. of 5 years for years ended 31st March,
|
Year |
2016 |
2017 |
2018 |
2019 |
2020 |
|
Net Profit Ratio |
15% |
14% |
13% |
12% |
10 |
Above table shows Net Profit Ratio is declining over a period of last 5 years, is example of-----------
Option 1: Time Series Analysis
Option 2: Trend Analysis
Option 3: Both 1 and 2
Option 4: None of the above
Correct Answer: Trend Analysis
Solution : Answer = Trend Analysis.
Every financial item is shown for each year in percentage terms via Trend Analysis. These trend analyses aid accounting users in evaluating the company's financial performance as well as in forming opinions regarding different trends and projecting the business's future trajectory.
Hence, the correct option is 2.
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