Which of the Following Statements Is True of Trend Analysis

question 69

Multiple Choice

Which of the following statements is true of trend analysis?

• A) It tracks the percentage changes of items in financial statements over several years.
• B) It computes percentages by dividing one account or line-item amount by another.
• C) It expresses the line item as a percentage of some other line item for the same period.
• D) It measure the ability of a company to meet its current obligations.

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Definitions:

Divisional Operating Income

The earnings generated from the operations of a specific division within a company, excluding expenses and revenues not directly related to the division's core operations.

Top Management

Refers to the highest level of managerial staff responsible for the overall strategy and performance of an organization.

Investment Turnover

The ratio that measures the efficiency of a company's use of its investments in generating sales or revenue.

Sales To Invested

This term might be referring to the ratio or measure of how effectively a company's invested capital is used to generate sales, but without a standard definition, it cannot be definitively explained.