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Trend analysis

The term "trend analysis" refers to the concept of collecting information and attempting to spot a pattern, or trend, in the information. In some fields of study, the term "trend analysis" has more formally-defined meanings. [1] [2] [3] In project management trend analysis is a mathematical technique that uses historical results to predict future outcome. This is achieved by tracking variances in cost and schedule performance. In this context, it is a project management quality control tool. [4]
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Although trend analysis is often used to predict future events, it could be used to estimate uncertain events in the past, such as how many ancient kings probably ruled between two dates, based on data such as the average years which other known kings reigned.

[edit] History
Today, trend analysis often refers to the science of studying changes in social patterns, including fashion, technology and the consumer behavior.
What Does Trend Analysis Mean? An aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future.

Trend Analysis
Trend analysis calculates the percentage change for one account over a period of time of two years or more.

Percentage change To calculate the percentage change between two periods: 1. Calculate the amount of the increase/(decrease) for the period by subtracting the earlier year from the later year. If the difference is negative, the change is a decrease and if the difference is positive, it is an increase. 2. Divide the change by the earlier year's balance. The result is the percentage change. Calculation of Percentage Change

309 $12.203 65. 2.000 0 8. so its percentages (see bottom half of the following table) are all 100.000 87. N/M is used in the above table for not meaningful.500 Operating expenses 42.743 Property & equipment 74.130 (1. net 18.000 81.000 95. If the earliest year is zero or negative.690 27.400) 1.8% (3.740 48.530 9.239 68. to develop a sales trend—follow the steps below: 1.202 $12.000 10.938 64.0.130 (1.9%) 25.950 $ 6. Calculation of Trend Percentages 20X1 Historical Data Inventory 20X0 20W9 20W8 20W7 $ 12.600 38.000 97.055 32.259 26. 2.330 Accounts Receivable. 6.000 9.670 28.000 Cost of goods sold 70.945 30.000 10. The percentages in the other years were calculated by dividing each amount in a particular year by the corresponding amount in the base year and multiply by 100.000 103.450 Current liabilities 27. 5.200 45. For each line item.102 $11. Trend percentages To calculate the change over a longer period of time—for example.567 19.050 Net income (loss) 8. 20X0 is the earlier year so the amount in the 20X0 column is subtracted from the amount in the 20X1 column. 3.330 Sales Rent Expense Net Income (Loss) Calculation notes: 129.990 29.100 47. In the following example.093 3.400) 7.422 78. Written as a formula.2% N/M N/M Cash $ 6. 20W7 is the base year. The percent change is the increase or decrease divided by the earlier amount (20X0 in this example) times 100. 4. A small absolute dollar item may have a large percentage change and be considered misleading. the percent calculated will not be meaningful.950 59. Most percents are rounded to one decimal place unless more are meaningful. the percent change is: 3. divide the amount in each nonbase year by the amount in the base year and multiply by 100. Select the base year.973 $11.869 5.20X1 20X0 Increase/(Decrease) Percent Change $ 620 (763) 26.812 .737 Sales 129.347 27.

0 100.9 115.0 1.5 119.0 100.3 140.0 206. The base year trend percentage is always 100.0 100.7 107.8 131.3 105.7 122.6 20W7 100.0%. If the base year is zero or negative.com/study_guide/Trend-Analysis.9 157. the trend percentage calculated will not be meaningful.5 117.3 20X0 103.0 100.topicArticleId-21248.3 113. At the end of 20X0. A trend percentage of less than 100.8 103. A trend percentage greater than 100.3 105. These 20X0 trend percentages reflect an unfavorable impact on net income because costs increased at a faster rate than sales.5 159. A negative trend percentage represents a negative number.7) 20W9 103.4 103.9% and the operating expenses have increased only 57. but the cost of goods sold had increased 31%. the sales had increased almost 20%.0 100. In this example.7 104.cliffsnotes.5 213.3 155.0% means the balance has decreased below the base year level in that particular year.7 (36.articleId21211. 2.7 109.3% over the five-year period while the cost of goods sold has increased only 55.0 100. the sales have increased 59.8 108.0% means the balance in that year has increased over the base year. and the operating expenses had increased almost 41%.4 20W8 102.8 133. The trends look different if evaluated after four years.html#ixzz0wZwc4UNX .1 93. Read more: http://www.0 95. The trend percentages for net income appear to be higher because the base year amount is much smaller than the other balances.20X1 Trend Percentages Inventory Property & equipment Current liabilities Sales Cost of goods sold Operating expenses Net income (loss) Calculation notes: 104.5%.