Trend analysis is a technique used in technical analysis to predict future stock prices or sales based on past data. It assumes past trends will continue. The document defines trend analysis and provides an example comparing sales, stock, and earnings before tax (EBT) from 2008-2012 for a company. Trend percentages are calculated by dividing each year's figure by the base year (2008) figure and multiplying by 100. Graphs show all metrics increasing over time, with sales up 200% and EBT up 209% by 2012 compared to 2008 levels. Trend analysis can be used to compare metrics over time periods, locations, groups, make projections, and assess performance versus standards or other organizations.

1. Trend
analysis

2. SUBMITTED TO
DR. ASHWANI BHALLA
(PROGRAMME CO-ORDINATOR)
SUBMITTED BY
KULVIR SINGH
6304

3. Meaning
Meaning of 'Trend Analysis' An aspect of
technical analysis that tries to predict the
future movement of a stock based or sale
based on past data. Trend analysis is based
on the idea that what has happened in the
past gives traders an idea of what will
happen in the future.

4. Definition
Definition in Concise Oxford Dictionary which is
that a trend is ‘a general direction and
tendency’.

5. Procedure For
Calculation Trends
 One year is taken as a base year. Generally,
the first or the last year is taken as base year.
 The % figures of base year are taken as 100.
 Trend percentage are calculated in relation to
base year. If a figure in other year is less than
the figure in base year the trend percentage
will be less than 100 and it will be more than
100 if figure is more than base year. Each
year’s figure is divided by base year’s figure.

6. For Example
year sales stock EBT (in Lakhs.)
2008 1881 709 321
2009 2340 781 435
2010 2655 816 458
2011 3021 944 527
2012 3768 1154 672

7. Formula
=Current Year’s figure *
100 / Base Year’s figure

8. Trend percentages
(Base year 2008=100)(In lakhs)
Year Sales Stock EBT
Amt. % Amt. % Amt. %
2008 1881 100 709 100 321 100
2009 2340 124 781 110 435 136
2010 2655 141 816 115 458 143
2011 3021 161 944 133 527 164
2012 3762 200 1154 162 672 209

9. Graphical View of
Trend Analysis
250
200
150
Sales
Stock
100
EBT
50
0
2008 2009 2010 2011 2012

10. Interpretation
 The sales have continuously increased in all
years up to 2012. The percentage in 2012 is 200
as compared to 100 in 2008. The increase in
sales is quite satisfactory.
 The figures of stock have also increased from
2008 to 2012. The increase in stocks is more in
2011 and 2012 a compared to earlier years.
 Profit before tax substantially increased. In five
years period it has more than doubled. The
comparative increase in profits is much higher
in 2011 and 2012 as compared to 2010.

11. Why Do Trend
Analysis
 Comparing one time period to another time
period.
 Comparing one geographic area to another.
 Comparing one group to another.
 Making future projections.
 For assessment of our output.
 For comparing with standards.
 Comparing with other organizations.

12. Kulvir Singh