Question

The trend analysis report of Marswell, Inc. is given below (in millions)

2019 2018 2017 2016 2015
Net income $690 $604 $470 $404 $398
Trend percentages 173% 152% 118% 102% 100%
Which of the following is a correct conclusion from the above analysis?
A) Net income for 2017 has decreased by 1 18% over that for 2015.
B) Net income for 2017 has increased by 1 18% over that for 2015
C) Net income for 2017 has decreased by 18% over that for 2015.
D) Net income for 2017 has increased by 18% over that for 2015

Answer 1

Answer: D) Net income for 2017 has increased by 18% over that for 2015

Step-by-step explanation:

Trend Analysis shows the difference in the value of a variable overtime. In the analysis below, the base year is 2015 and so has a trend percentage of 100%.

The increases or decrease in Net Income in subsequent years can be inferred by the different in the trend percentages of the various years. For instance, the increase (decrease) in net income in 2019 over 2015 is;

= 173 - 100

= 73%

This means that income in 2019 is 73% higher than it was in 2015.

The same goes for 2017 and 2015;

= 118 - 100

= 18%

Income in 2017 has increased by 18% since 2015.