Question

Main objective of trend analysis is ______.

पर्याय

• To make comparative study of the financial statements for a number of years

• To indicate the direction of movement

• To help in forecasts of various items

• All of the above

Answer 1

Main objective of trend analysis is to make comparative study of the financial statements for a number of years, to indicate the direction of movement and help in forecasts of various items.

Explanation:

The main objective of trend analysis is to compare a firm’s financial data over multiple years in order to detect trends and directions of development. It helps assess whether financial items such as sales, profits, or expenses are increasing or decreasing. Additionally, it helps management estimate future performance and make informed decisions based on past trends.