Answered: How do managers, bankers, and security…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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How do managers, bankers, and security analysts use trend analysis, bench-marking, percent change analysis, and common size analysis?

Expert Solution

Step 1

Usually a managers, bankers, and security analysts use financial tools and techniques to measure and evaluate the financial performance of the company.

Trend analysis:

When the ratios are plotted on the graph over a span of time it demonstrates the trend analysis. By analyzing the pattern of related factors such as productivity ratio, leverage and asset management factors, the managers may use trend analysis. The trend of liquidity and market value ratios can be seen in the same way by bankers and security analysts respectively.

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