Question

The trend analysis report of Doppler Inc. is given below: (In millions) 2017 2016 2015 2014...

The trend analysis report of Doppler Inc. is given below:

(In millions) 2017 2016 2015 2014 2013
Net income $650 $602 $456 $403 $398
Trend percentages 163 151 115 101 100

Which of the following is a correct conclusion from the above analysis?

A. Net income for the year 2016 is 151% of previous year.

B. Net income for the year 2016 is 151% of that for the year 2013.

C. Net income for the year 2017 increased by 163% from 2016.

D. Net income for the year 2016 decreased by 151% from 2015.

Homework Answers

Answer #1

Correct answer-----------B. Net income for the year 2016 is 151% of that for the year 2013.

.

The trend analysis uses one year as a base and shows all other years amount as a percentage of base year.

Generally base year is the farthest year in the analysis. In above case base year is 2013.

Every amount of year 2017 to 2014 are shown as a percentage of amounts in 2013.

So Net income for the year 2016 is 151% of that for the year 2013 and Net income for the year 2016 is 151% of 2013 nit previous year. Similarly Net income for the year 2017 is 163% of year 2013.

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