+1 862 207 3288 B1A. FUTURE PERFORMANCE : PLEASE PROVIDES A PLAUSIBLE ANALYSIS, WITH ADEQUATE SUPPORT, OF WHAT THE HISTORICAL ANALYSIS INDICATES ABOUT FUTURE PERFORMANCE.
TASK TIPS:
For B1a TASK: What you need is some additional trend information that you can extend into the future. A good one is the Total Operating Expenses. Look at the Vertical
Analysis and see what the trend of Total Operating Expenses is as a percentage of sales. If it continues to rise as sales goes up and down, it may indicate a problem
in future years.
FIRST, start with a six-year horizontal analysis using the Trend Analysis tab.
SECOND, What you are trying to accomplish is to provide an explanation about how the first three years performed and what is forecast to happen in the next three. So
the six-year analysis has two parts. The first three years establishes a trend or at least a platform to make observations about the future. Observe the two sets of
years for repeating elements. Slow growth. Dips in sales volume, etc. point them out.
THIRD, Look at the income statement for other trends. You might look at Total General and Administrative expenses on the vertical analysis. If the expense trend
continues in years 15-17 like it did in years 12-14, will that impact profits? If it does say how it will.
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