Although the company has grown in the last two years, it has witnessed significant growth in the year 2018.The following three years’ information has been extracted from the income statement: Let us take the example of Apple Inc.’s income statement for the year 2018 to illustrate the concept of trend analysis. Overall, the company is trending up, which may be sustainable in the near term if the market remains favorable.īelow is the graphical representation of the trend in each line item.Although, the growth in net income can also be due to some non-operating income. The company’s profitability experienced the highest growth in the year 2018, which may indicate that it has been able to improve its operational efficiency.However, since then, the company’s financials have been on an uptrend for the last two years. The company witnessed deterioration in its financials in the year 20.In the above tables, it can be seen that: Trend Analysis is calculated using the percentage change formula given below. Similarly, Calculated the year 2016, 2017, 2018 by the given formula. The year 2015 is calculated using the above-given formula. Trend Analysis is calculated using the change in amount formula given below.Ĭhange in Amount = Current Year Amount – Base Year Amount The following income statement information is available for the last five years: which is engaged in the manufacturing of customized machine parts. Let us take the example of a company DFG Inc. You can download this Trend Analysis Formula Excel Template here – Trend Analysis Formula Excel Template Trend Analysis Formula – Example #1
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