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In financial analysis, the trend of data is more important than the data themselves. Do you...

  1. In financial analysis, the trend of data is more important than the data themselves. Do you agree, Discuss
  2. Discuss the concepts of accounting revenue and expenses
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Answer #1

Financial analysis is a process of comparing and evaluating metrics to measure the financial health of a business. A data derived out of financial items will not add value to the analysis unless it serves comparability i.e. comparing the current years ratios with the previous year, comparison with the industry figures among others. Trend of the data provides a meaningful analysis to the evaluation and comparability.

Accounting revenue is the revenue that can be measured in dollar amount and is recognized as per accrual basis. Accounting expense is the outflow of money in dollar terms and is also recognized on accrual basis.

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