Trend analysis is a process in which we compare a company’s results, or the results of a ratio, over time.

Question

BlackTom AI · Accepted Answer

The question describes trend analysis as a process of comparing a company's results, or the results of a ratio, over time. 
Option 1: True. This aligns with the standard definition of trend analysis, which emphasizes examining performance across multiple periods to identify patterns, direction, and rate of change. It often uses absolute results (like revenue, profit) or ratios (like margins, return on assets) plotted over successive periods to detect trends. 
Option 2: False. This would be incorrect because trend analysis fundamentally relies on comparisons across time, not just a snapshot from a single period. By focusing on changes over time in either results or ratios, trend analysis helps assess improvement, deterioration, or consistency, making a blanket claim that it does not involve time-based comparison inaccurate. 
In sum, recognizing that trend analysis uses time-series comparison—whether on raw results or on ratios—supports the statement as true, while the idea that it excludes time-based comparison contradicts the core concept.

Trend analysis is a process in which we compare a company’s results, or the results of a ratio, over time.

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