1. trend analysis
trend analysis is main tool of financial analysis . It is the duty of management accountant to calculate trend percentage and analysis them and interpretate the decision.
in trend analysis first of all all the items changed in percentage form
steps of calculate trend percentage
- always base year must be 100
- next year's value % = next year value divided By base year value and then multiply with 100
- interpretate
explaination
suppose sita taxtile company wants to know his trend of sale ?
she gives us last five year total sale in lakhs of rs.
years and sale trend
2001-2002 1445 100
2002-2003 2001 2001/1445x100=138
2003-2004 3546 3546/1445x100=245
2004-2005 4748 328
2005-2006 5109 353
2.common size statement analysis
common size statement is just conversional /change of actual value of balance sheet and income statement in percentage form and then analysis and take decision
3.Ratio analysis
this will tell you in next class wait
