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__________ analysis is the process of studying a series of ratios for a company and/or industry overtime.

  • Trend analysis is the process of studying a series of ratios for a company and/or industry overtime.
  • Performance indicators usually are in the form of ratios, that is, a comparison of one piece of financial data to another.
  • Comparing ratios over a period of time is referred to as trend analysis, which shows whether financial performance is improving or deteriorating.
  • In addition to trend analysis, ratios should be analyzed in the context of other ratios to determine the overall financial performance of an MFI.
  • Calculating ratios does not in itself result in improved financial performance.
  • However, analysis of the performance indicators (ratios) and changes provides information that can identify potential or existing problems, which can lead to changes in policies or operations, which in turn may improve financial performance.