Martin Powers
09/02/2024 · Middle School
What is the descriptive analysis technique that identifies trends over time? ratio analysis summary statistics norizontal analysis
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The descriptive analysis technique that identifies trends over time is **horizontal analysis**. Horizontal analysis involves comparing financial data over multiple periods to identify trends, growth patterns, and changes in performance. It typically looks at line items in financial statements over time to assess how they have changed, which helps in understanding the direction and magnitude of changes in financial performance.
Ratio analysis and summary statistics are also useful analytical techniques, but they do not specifically focus on identifying trends over time in the same way that horizontal analysis does.
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Horizontal analysis identifies trends over time.
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