Page 50 - Managerial Accounting-MGT 145

Module 11: Using Managerial Accounting: Trends and Ratios

In this unit we examine the three-pronged approach

managerial accountants and potential investors typically
use to analyze a company’s financial information.

First and second, we use Trend Analysis and Common-
size (Horizontal/ Vertical Analysis) to examine trends

the company has experienced within its own financial
sphere, such as sales from one year to the next.

We compare the company's financial measures with its
main competitors in the industry. Finally, we compare

the company's Financial Ratios with industry wide
averages or standards.